Telkom has released its financial results for the year ended 31 March 2020, which revealed that the company’s operating revenue increased by 3.0% to R43 billion and its EBITDA decreased by 8.7% to R10.3 billion.
This earnings drop is despite continued mobile service revenue growth of 54.4% year-on-year and is attributed to a number of factors – including voluntary severance and early retirement packages as well as the impact of COVID-19 on the business.
Fixed voice revenue continued to decline, falling by 22.2% over the past year to R8.7 billion.
Telkom’s fixed-line subscribers also continued to fall, declining from 2,267,000 in March 2019 to 1,602,000 in March 2020.
This means Telkom lost 665,000 fixed-line subscribers year-on-year, which equates to a 29% decline in its fixed-access line customer base.
The company saw significant growth in active mobile users, with prepaid customers increasing by 20.8% and postpaid by 36.8%.
Adjusted free cash flow increased by 266.5% to R2 billion, and the company’s cash at the end of the year rose by 231% to R4.7 billion.
Telkom CEO Sipho Maseko explained that to mitigate the pressure on free cash flow (FCF), Telkom implemented various capital optimisation initiatives.
“I am pleased that, despite the margin pressure experienced, our FCF improved three-fold to R2.0 billion compared to the previous year, the best FCF performance in several years,” Maseko said.
“We will continue to focus on Telkom’s liquidity during the tough trading environment.”
The five slides below provide an overview of Telkom’s performance over the past year.
How Telkom’s revenue mix has changed since 2013
Telkom voice revenue falls, mobile service revenue grows