However, the company has struggled to unlock shareholder value and has rolled back plans to sell part of Openserve.<\/p>\n\n\n\n
Despite its challenges, Telkom has successfully transformed the company from a fixed-line player to a largely data-driven mobile operator.<\/p>\n\n\n\n
Apart from the growing mobile business division, Openserve, with its fibre assets, is another valuable part of the company.<\/p>\n\n\n\n
“The latest set of results reflects the transformation and some of the benefits, including improved free cashflow,” Williams said.<\/p>\n\n\n\n
“It looks like Telkom is winning market share in the mobile space. Their numbers were much better than Vodacom and MTN’s.”<\/p>\n\n\n\n
Other positives include the improved performance of BCX and Openserve, which are moving to next-generation products.<\/p>\n\n\n\n
Earlier this year, Telkom also successfully sold its mast and tower business, housed inside Swiftnet, for R6.75 billion.<\/p>\n\n\n\n
“Telkom is busy executing on their strategy, and the share price is starting to reflect the value of the sum of the parts,” he said.<\/p>\n\n\n\n
Williams added that Telkom, which is trading at a price-to-earnings (P\/E) ratio of 7, can provide value at these levels.<\/p>\n\n\n\n
“If they can continue to execute and unlock value, there will be returns for shareholders,” he said.<\/p>\n\n\n\n
Devin Shutte from The Robert Group added that Telkom should be credited with successfully executing its strategy.<\/p>\n\n\n\n
This includes growing its mobile operator division and improving the financial performance of its struggling divisions.<\/p>\n\n\n\n
Telkom’s capital expenditure and debt<\/h2>\n\n\n\n
Telkom CFO Nonkululeko Dlamini said they continued with a smart capital spend of R2.5 billion invested in infrastructure.<\/p>\n\n\n\n
“The capital intensity ratio of 11.9% remains efficient and in line with our forecast of 12% to 15%,” she said.<\/p>\n\n\n\n
Capital intensity refers to the proportion of revenue a company allocates to capital expenditure.<\/p>\n\n\n\n
Capital expenditure is important for telecommunication companies as it indicates how much the company invests back into its network to keep it competitive and up to date.<\/p>\n\n\n\n
Telkom has seen a general reduction in its capital intensity over the past few years, dropping from over 20% to 11.9% in its newly released interim results.<\/p>\n\n\n\n Dlamini said their improved cash generation and strengthened balance sheet position them well to continue investing for future growth.<\/p>\n\n\n\n Telkom reported a 10% reduction in its interest-bearing debt from R14.8 billion on September 2023 to its current R13.3 billion.<\/p>\n\n\n\n This has reversed the trend of accelerating debt within the group since 2022. Reducing debt, in conjunction with lowering interest rates, will have a positive impact on the group’s bottom line.<\/p>\n\n\n\n Telkom’s net interest expense represented 34% of its operating profit. In the previous interim results, Telkom’s net interest expense represented 50% of its total operating profit.<\/p>\n\n\n\n This reduction in debt has, therefore, contributed to Telkom’s reporting a higher net profit margin of 7.7% compared to the prior year’s 4.7% net profit margin.<\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" Following Telkom’s latest results, prominent analysts believe that the company could give investors good returns if it continues to execute its successful strategy.<\/p>\n","protected":false},"author":23,"featured_media":570414,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[80335],"tags":[42,89696,109,41],"class_list":["post-571068","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-mtn","tag-nonkululeko-dlamini","tag-telkom","tag-vodacom"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/571068"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=571068"}],"version-history":[{"count":3,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/571068\/revisions"}],"predecessor-version":[{"id":571089,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/571068\/revisions\/571089"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/570414"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=571068"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=571068"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=571068"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2024\/11\/1-1.jpg\")
<\/figure>\n\n\n\n![\"\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2024\/11\/2-2.jpg\")
<\/figure>\n\n\n\n