Telkom released its interim results on Tuesday, reporting that its after-tax profits surged by 52.3% from R641 million to R976 million.
Considering only its continuing operations, Telkom’s after-tax profit increased 61.8% — from R487 million during the same period last year to R788 million.
However, Telkom cut its capital expenditure by R546 million.
Between 1 April and 30 September 2022, Telkom invested R3.7 billion into its networks. During the same period this year, it reduced its investment by 14.8% to R3.1 billion.
Overall revenue was up 2.5% to R21.8 billion, and Ebitda increased 1.7% to R5 billion.
Telkom said its earnings before interest, taxation, depreciation, and amortisation (Ebitda) growth was limited by higher bad debt provisions.
Mobile service revenue increased 5.8% to R9.3 billion, and free cash flow increased 130.4% to R573 million.
“In the first half of FY2024, we prioritised driving cash generation by harnessing [operation expenditure] savings, managing working capital, and focused on capital expenditure for growth and maintaining the availability of our fixed and mobile networks,” said Telkom CEO Serame Taukobong.
“Telkom saw good growth in mobile service revenue driven by value-compelling propositions.”
Taukobong said Telkom sustained its fibre business growth trajectory from monetising fibre rollouts and saw good growth in its IT business driven by increased demand for hardware and software by enterprise customers.
“The Group also continued to manage the migration to newer technologies as legacy and fixed voice revenues reduced as expected, and will continue to do so in the coming 12 to 18 months,” said Taukobong.
“Despite the challenging macro-economic environment, our guidance for FY2024 remains unchanged,” he continued.
“Group revenue and Ebitda are expected to grow at low to mid single digits as we focus on driving the top line and harnessing cost savings to improve our profitability by FY2025.”
Taukobong said they would continue to invest in their infrastructure to facilitate growth, with the capex-to-revenue ratio expected to be on the lower end of their 16% to 18% guidance for FY2024.