Over the past six months, South African telecommunications shares took a hammering on the Johannesburg Stock Exchange (JSE).
South Africa’s economy has faced many challenges in 2018, which was reflected in the JSE All Share Index – which has lost 3.18% in the year-to-date.
Local telecoms stocks, with the exception of Telkom, did significantly worse than the JSE All Share Index.
Vodacom lost 14.71%, MTN dropped by 19.32%, and Blue Label Telecoms – which owns a large stake in Cell C – dropped 30.55%.
JSE All Share Index: -3.18%
Telkom share price: +4.38%
Telkom released its financial results for the year ended 31 March 2018 in May, which showed that group operating revenue at the company was flat – at R41 billion.
Telkom CEO Sipho Maseko blamed a weak economic environment, while the private and public sectors deferred and lowered their information communications and technology spend due to a lack of growth.
Maseko and Telkom’s strategy has paid off in terms of share performance this year, however, as it was the only big South African telecoms company whose share price showed growth in 2018.
Vodacom share price: -14.71%
Vodacom’s financial results for the year ended 31 March 2018 showed a 6.3% increase in revenue, to R86.4 billion.
In South Africa, service revenue increased 4.9% to R54.6 billion, supported by strong customer additions, a higher contribution from data revenue, and growth in enterprise services.
The market, however, still punished Vodacom over the last two months, with its share price dropping from R155 at the end of May to below R120 a month later.
MTN share price: -19.32%
In March, MTN published its financial results for the year ended December 2017, which showed a decline in group revenue to R132.8 billion, from R147.9 billion.
However, operating profit climbed to R20.6 billion, from R14.2 billion in 2016, which was a good sign for the company.
MTN has faced numerous challenges over the last few years, though, which saw its share price decline from a high of R260 in September 2014 to R105 at the end of June 2015.
Blue Label Telecoms share price: -30.55%
In February, Blue Label Telecoms released a strong set of results for the six months ended 30 November 2017, which showed it increased revenue to R13.5 billion.
Co-CEO Brett Levy also shed light on the company’s plan to increase its airtime, prepaid electricity vouchers, and electronic product plays in the local market.
To date, the market has not been convinced, and the Blue Label Telecoms share price continued its slide, which started in August 2017.