In This Article:
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Revenue Growth: Up 1.9% driven by data and fiber revenues.
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Mobile Services Revenue: Increased by 10%.
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Fiber Revenue: Grew by 15%.
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EBITDA: Increased by 18.3% to ZAR5.6 billion.
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Adjusted EBITDA Margin: 26.2%.
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Free Cash Flow: Positive at ZAR768 million.
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Net Debt to EBITDA: Improved to 1.3 times for continuing operations.
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Headline Earnings Per Share: Grew by 68% for continuing operations.
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Capital Expenditure: Total of ZAR2.7 billion, with 48% on mobile and 38% on fiber.
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Interest-Bearing Debt: Reduced by 10.1%.
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Cash Balances: ZAR3.7 billion.
Release Date: November 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Telkom SA SOC Ltd (FRA:TZL1) reported a robust set of interim results, showing significant progress in their data-led strategy.
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The company achieved a notable improvement in their adjusted debt to EBITDA ratios, indicating a stronger balance sheet.
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Mobile data and fiber data revenues continue to drive growth, with mobile services growing by 10% and fiber-related services by 15%.
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The company successfully executed on its promise to exit non-core properties, contributing to financial efficiency.
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Telkom SA SOC Ltd (FRA:TZL1) maintained a positive free cash flow of ZAR768 million, showcasing effective financial management.
Negative Points
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The administrative process for the Swiftnet exit is delayed, awaiting ICASA's approval, which could impact future plans.
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Despite improvements, the company still faces challenges with legacy revenue streams, which are declining.
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There is ongoing restructuring within BCX, including a Section 189 process, indicating internal challenges.
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The company has not seen a significant increase in device sales despite market changes, which could impact revenue growth.
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Roaming costs, although reduced, remain a factor, and the company acknowledges it will never be completely roaming-free.
Q & A Highlights
Q: Can you provide an update on the capacity of the mobile network given the strong growth in mobile broadband subscribers? Also, there was a payment to Google of about ZAR1 billion. Is this a one-time payment or should it be expected to continue? A: The key driver behind mobile growth is our spectrum and the fact that over 75% of our towers are on fiber. We will continue to invest in core capacity. The Google payment was a one-time payment, but we have a long-term arrangement with Google that involves back-to-back agreements.
Q: Are you expecting accelerating operational trends in the next few quarters, and how do you see the demand for consumer and IT services in South Africa? A: We are maintaining a positive outlook and expect operational trends to continue positively. There is an increasing demand for consumer services, particularly in the SME segment, where we are focusing our efforts.