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GROUP OPERATING REVENUE |
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| Group operating revenue increased 7.3% to R25,147 million
(September 30, 2005: R23,447 million) in the six months ended September
30, 2006. Fixed-line operating revenue, after inter-segmental eliminations,
increased 0.4% to R16,139 million primarily due to solid growth in
data services and increased subscription revenue, partially offset
by lower traffic and interconnection revenues. Mobile operating revenue,
after intersegmental eliminations, increased 22.2% to R9,008 million
primarily due to customer growth offset by declining ARPUs. |
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| GROUP OPERATING EXPENSES |
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| Group operating expenses increased 9.7% to R17,675
million (September 30, 2005: R16,109 million) in the six months ended
September 30, 2006, primarily due to a 21.7% increase in operating
expenses in the mobile segment to R6,899 million (after inter-segmental
eliminations). Fixed-line operating expenses increased 3.2% to R10,776
(after inter-segmental eliminations) primarily due to increased employee
expenses, selling general and administrative expenses, services rendered
and operating leases, partially offset by a decrease in depreciation,
amortisation, impairment and write-offs and payments to other operators.
The increase in mobile operating expenses of 21.7%, after inter segmental
eliminations, was primarily due to increased gross connections resulting
in increased costs to connect customers onto the network as well as
increases in staff expenses due to an increase in the headcount to
support the growth in operations. Mobile payments to other operators
also increased as a result of the increased outgoing traffic terminating
on other mobile networks relative to traffic terminating on the fixed-line
network. |
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| INVESTMENT INCOME |
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| Investment income consists of interest received on
short-term investments and bank accounts. Investment income decreased
21.7% to R170 million (September 30, 2005: R217 million), largely
as a result of less cash available for short-term investments due
to higher taxation payments. |
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| FINANCE CHARGES |
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| Finance charges include interest paid on local and
foreign borrowings, amortised discounts on bonds and commercial paper
bills, fair value gains and losses on financial instruments and foreign
exchange gains and losses. Finance charges decreased 41.3% to R437
million (September 30, 2005: R744 million) in the six months ended
September 30, 2006, primarily due to a 4.4% decrease in interest expense
to R673 million (September 30, 2005: R704 million) as a result of
the redemption of local and foreign loans. In addition to the decrease
in the interest expense, net fair value and exchange gains on financial
instruments of R236 million (September 30, 2005: Loss of R40 million)
arose primarily as a result of currency movements. |
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| TAXATION |
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| Consolidated tax expense increased 3.8% to R2,844 million
(September 30, 2005: R2,739 million) in the six months ended September
30, 2006. The consolidated effective tax rate for the six months ended
September 30, 2006, was 38.3% (September 30, 2005: 38.6%). Telkom
Company’s effective tax rate was 28.7% (September 30, 2005: 32.5%).
The lower effective tax rate for Telkom Company in the six months
ended September 30, 2006, was primarily due to higher exempt income
resulting mainly from dividends received. Vodacom’s effective tax
rate decreased marginally to 37.3% (September 30, 2005: 37.9%). |
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| PROFIT FOR THE YEAR AND EARNINGS
PER SHARE |
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Profit for the six months ended September 30, 2006
attributable to the equity holders of Telkom increased 4.9% to R4,500
million (September 30, 2005: R4,288 million) in the six months ended
September 30, 2006.
Group basic earnings per share increased 7.5% to 868.1 cents (September
30, 2005: 807.4 cents) and Group headline earnings per share increased
10.6% to 874.7 cents (September 30, 2005: 790.6 cents). |
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