Telkom has marked a strong set of interim results by declaring a one-off dividend of 90c a share.
<B>Salient figures</B>
Telkom results for the six months to 30 September 2003.
Figures for the prior-year period in parentheses.
Operating revenue: R20.1b (R18.32b)
Other income: R87m (R47m)
Operating profit: R4.25b (R2.81b)
Profit before tax: R2.64b (R1.18b)
Net profit: R1.66b (R644m)
EPS: 298.5c (115.6c)
HEPS: 335.9c (123.9c)
Current assets: R9.89b (R11.2b)
Cash and equivalents: R1.71b (R1.09b)
Current liabilities: R13.7b (R15.55b)
Cash generated from operations: R6.26b (R4.04b)
The telecommunications utility more than increased operating revenue to R20.11 billion in the six months to 30 September, compared with R18.32 billion for the same period a year earlier. Headline earnings per share were boosted from 123.9c to 335.9c.
CEO Sizwe Nxasana says the appreciation of the rand is positive for the group in the long term as a significant portion of capital and operating expenditure is denominated in foreign currency. The rand appreciated 27.6% against the dollar in the period.
He says while such appreciation had a negative effect on Telkom`s international interconnection revenues and the translation of Vodacom`s revenues from international operations, the currency`s appreciation resulted in savings from foreign denominated operating and capital expenditure and contributed to the improvement in operating margins.
"Although the strong rand positively contributed to operating profit, it negatively impacted net reported earnings as a result of the R561 million loss on the net fair value and exchange losses of financial instruments."
Nxasana says the group is continuing to benefit from exceptional customer growth in its mobile business and the margin expansion and strong cash generation in the fixed-line business.
"In the period under review, we have successfully grown our revenue in selected markets by expanding our integrated product and service offerings. We have increased profitability and cash flows through strict cost discipline. Telkom has significantly reduced indebtedness and is pleased to be reinstating its dividend policy."
He says the fixed-line business delivered solid revenue growth, driven largely by growth in data volume. Margin expansion was achieved through a strong focus on cost cutting, improving productivity and enhancing competitiveness.
Joint venture Vodacom, which also reported its results this morning, grew its South African customer base by 20% and made good progress in its African strategy, increasing customers to more than 1 million.
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