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Johannesburg, South Africa – November 13, 2006, Telkom
SA Limited (JSE and NYSE: TKG), South Africa’s largest communications
group today announced Group results for the six months ended September
30, 2006. The Group delivered a solid performance across both business
segments primarily as a result of continued growth in the fixed-line
and mobile businesses. |
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| GROUP FINANCIAL HIGHLIGHTS FOR
THE SIX MONTHS ENDED SEPTEMBER 30, 2006 |
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Operating revenue up 7.3% to R25,147 million |
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0.8% growth in operating profit to R7,685 million |
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40.7% group EBITDA margin |
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6.6% net debt increase to R11,659 million, and net debt to
equity ratio of 41.6% |
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Headline earnings increased by 10.6% to 874.7 cents per share |
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Basic earnings increased by 7.5% to 868.1 cents per share |
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| Statement by Papi Molotsane,
Chief Executive Officer: |
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“The Telkom Group has delivered a commendable performance
across all business segments, reporting headline earnings per share
growth of 10.6% to 874.7 cents per share.
The fixed-line business’ focus on growing annuity revenue streams
and increasing the contribution of data services has resulted in revenue
increasing by 0.7%. The 3.1% increase in operating expenses to maintain
the quality and functionality of our network is a testament to our
determination to improve service levels.
The mobile business has again delivered an excellent performance increasing
estimated market share to 59%.
Telkom is operating in a challenging environment and our commitment
of staying ahead of the curve is evident in the 41.0% increase in
fixed-line capital expenditure. It is imperative that we be able to
take our customers into the future ICT landscape. We believe that
the next generation network we are deploying will provide our customers
with world class ICT solutions and ensure long-term sustainable returns
for our shareholders.” |
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| SOLID FINANCIAL PERFORMANCE |
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The Group has delivered a solid performance for the
six months ended September 30, 2006. Group operating revenue increased
7.3% to R25,147 million and group operating profit increased 0.8%
to R7,685 million. The Group earnings before interest, tax, depreciation
and amortisation (“EBITDA”) margin declined to 40.7% compared to 44.5%
in the six months ended September 30, 2005. This was mainly due to
a lower fixed-line EBITDA margin of 42.0% for the six months ended
September 30, 2006 compared to 46.6%, for the six months ended September
30, 2005, as a result of increased fixed-line operating expenditure
partially offset by strong fixed-line data revenue growth.
The EBITDA margin of 33.8% for the mobile business decreased marginally
compared to 34.4% in the six months ended September 30, 2005 mainly
as a result of increased operating expenditure partially offset by
increased revenues resulting from strong customer growth. Headline
earnings per share for the six months ended September 30, 2006 grew
by 10.6% to 874.7 cents per share and basic earnings per share grew
7.5% to 868.1 cents per share. The strong growth in earnings was attributed
to the increase in operating profit and a 41.3% reduction in finance
charges.
Cash generated from operations increased 4.9% to R9,046 million and
facilitated capital expenditure of R4,193 million and the repurchase
of 11,053,865 Telkom ordinary shares to the value of R1,454 million.
Our Group net debt to equity ratio of 41.6% at September 30, 2006,
has increased from 23.2% at March 31, 2006. |
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