Telkom to ring in the numbers

http://www.finance24.co.za/Finance/Companies/0,,1518-24_1537942,00.html

Telkom to ring in the numbers
06/06/2004 20:18 - (SA)

Johannesburg - Analysts are expecting stellar annual results from partially-privatised telecommunications giant Telkom on Monday, capping what they describe as a spectacular maiden year for the group which took to the boards of both the JSE Securities and New York bourses in March last year.

A survey of analysts by I-Net Bridge points to earnings likely being up by more than 130%, once again attributed to significant cost cutting in the fixed-line business. The I-Net Bridge consensus forecast is headline earnings per share (HEPS) of around 725.9c compared with 312c the previous year.

Group revenue is expected to have increased in the region of 8.5% to around R40.8bn, with fixed line revenues estimated to be about by about 4.5% and revenues from mobile telephone service operator Vodacom, in which Telkom has a 50% stake, up by about 19%.

Vodacom, which also reports on Monday, is expected to report headline earnings of around R3.1bn.

Telkom's share price has grown exponentially since listing on March 4 last year. Shares in the telecoms group were initially offered at R28 a share - and even as low as R22.40 as part of a special scheme for the previously disadvantaged - and on April 15 this year hit R87.40 a share.

The share closed 1.3% down on Friday at R77.85.

Edited by Fadia Salie

<b>Update </b>
http://www.finance24.co.za/Finance/Companies/0,,1518-24_1538794,00.html

Telkom rings in the numbers
07/06/2004 08:14 - (SA)

Johannesburg - Telecommunications giant Telkom on Monday reported an impressive 175% jump in headline earnings per share to 864c for the year to end-March, from 314c a year ago.

A final dividend of 110c a share was declared, which together with the special dividend of 90c a share, makes a total of 200c for the year.

The I-Net Bridge consensus forecast was for HEPS of 725.9c a share and a dividend of 226.4c.

In its first full year as a listed company, Telkom's group operating revenue was up 8.8% to R40.795bn from R37.507bn, driven by a 23.3% increase in mobile revenue. Net profit for the year improved to R4.523bn from R1.63bn a year ago, while operating profit increased 39.5% to R9.088bn.

Cellular operator Vodacom, in which Telkom has a 50% interest, saw operating revenue rise to R10.352bn from R8.401bn a year earlier.

"The Telkom Group delivered strong results for the year. Our continual focus on driving greater capital and operational efficiencies combined with good growth from both our fixed-line data business and our mobile segment, has allowed us to deliver headline earnings per share growth of 175%," said Telkom CEO Sizwe Nxasana.

"In our fixed-line business, we expanded operating margins by aggressively defending revenues and systematic streamlining of our operations, while our mobile business continued to deliver robust growth by winning customers in the local market and in other African countries.

"These achievements underpinned the generation of strong cash flows, allowing the Group to repay debt and invest capital in driving growth and supporting ongoing cost savings.

"This positive momentum, reinforced by a strengthened capital structure and a relatively buoyant economic environment, enabled the Group to meet and exceed its performance targets for the year, and deliver on its core strategic objective of returning value to shareholders," he added.

Looking ahead, Nxasana said the Group will seek to continue optimising its capital structure to support the appropriate allocation of cash to ongoing cost saving initiatives and pursuing new growth opportunities, while returning dividends to shareholders.

The balance sheet now allows greater financial flexibility to participate in future corporate action, he said.

"Although the Group will continue to look inward to extract further operating efficiencies, the focus will increasingly shift outward to seek new growth opportunities in selected new market areas, such as data, and exploiting synergies between fixed-line and mobile. Additionally, both businesses will seek to pursue considered African expansion," he concluded.

Edited by Fadia Salie

<b><hr noshade size="1"></b><font size="2"><font color="red"><b>You can take Telkom out of the Post Office but you can't take the Post Office out of Telkom.</b></font id="red"></font id="size2">

This is bad, this is going to be very bad. Telkom is artificially boosting their share price and the bubble going to burst in a big way. I feel bad for the many investors, some of whom are in the "previously and still disadvantaged" position and who are thinking that they will make loads of money.

As it stands now their share price is only driven by their exorbitant prices, and when they're forced to drop, or when a major shareholder such as SBC sells their shares, the entire bottom could fall out of Telkom's stock and leave people high and dry.

*sigh*

When will our government learn. You're either a business or a government, you can't be both.

You are right Tharaxis, but government controls the money leaving our country. Thus nobody invested in Telkom can pickup and leave as they want. The situation is very bad! Have you tried to pay for a product overseas without a credit card? See the costs attatched to that!

The bottom can fall out if another cometitor arrives, which is why there is none!

He who does not understand the value of war at the right time, cannot comprehend the value of life at any time - Anonymous

Also tells the bigger story of the long prolonged delays of the SNO and ICASA's apparent inability to do anything meaningful without 3 to 4 years in court and millions in legal expenses.

I think one can assume that Telkom's privatisation was a royal blunder and the only people winning are the shareholders in the short term. Not very good foresight for SA's economic development.

<b><hr noshade size="1"></b><font size="2"><font color="red"><b>You can take Telkom out of the Post Office but you can't take the Post Office out of Telkom.</b></font id="red"></font id="size2">

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">we expanded operating margins by aggressively defending revenues
<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">

Maybe it should read, Increasing our prices while we decrease costs and employ hopeless people for helpdesk support.

This might also explain the whole ISDN vs ADSL issue as they are aggressively defending their revenues.

Of course I don't look busy.....I did it right the first time.

Aaaaarrrrghhh.. why do we have to put up with such nonsense??[!][!][!]
Did any of the senior management of Telkom attend any form of tertiary educational institution?

I think any institution would bow its head in shame at giving one of those fools a qualification in anything. These are NOT the principles taught to learners in any society.

CORRUPTION is slowly but surely strangling every last drop of blood out of the veins of the South African economy. I honestly don't know what else to call this situation - The use of unfair and stifling business principles to promote oneself.

Imagine the uproar from Telkom if someone were to request a breakdown of their 178% increase. What percentage would be due to lay-offs, price increases, inflated pricing and sub standard service delivery?? I am certain if you remove these factors you would expose a highly inefficient company whom operate at a loss.

But of course to the investors and controlling bodies it's only the percentages that count, shame on you...

<font color="blue">TRUTH does <u>not</u> <i>lie</i> in <font color="green">opinions</font id="green"> and <font color="green">perception</font id="green">... but in that which <i>conforms</i> to <font color="red">fact</font id="red"> and <font color="red">reality</font id="red"></font id="blue">