Telephony group Telkom is expecting to report an increase of 15% to 25% in headline earnings per share and a rise of 19% to 27% basic earnings per share for the half-year ended 30 September.
In a statement to shareholders today, the company says this performance was mainly driven by 16% growth in operating profit as a result of solid growth in group earnings before interest, taxes, depreciation and amortisation (EBITDA), partially offset by an increase in the effective tax rate from 28.8% in the prior period to 34.8%.
“The group performance was sound, despite a difficult trading environment due to the adverse impact of COVID-19 on the economy. Group revenue showed resilience in the face of this pandemic, remaining broadly flat compared to the prior period,” says Telkom.
The company’s interim results will be released next Tuesday.
In the notice to shareholders, Telkom says its mobile business continued its growth trajectory, placing Telkom Mobile firmly as the third largest mobile operator in SA.
“Management relentlessly focused on its sustainable cost management programme to protect group EBITDA and margin. Management optimised both direct costs and opex with a significant improvement in total cost to revenue ratio compared to the prior period.”
It adds the group EBITDA performance was also supported by the reversal of R66 million relating to a COVID-19 impairment on receivables provision that was recognised at the 31 March 2020 financial year-end.
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