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Telkom SA SOC Limited today published improved financial results for the year ended 31 March 2024, as the group delivered a stronger, more robust operational performance.
The healthy results come despite inflationary pressures. Increased operating margins were driven by continued demand for next-generation offerings.
During the year, our cost-optimisation efforts helped achieve a 5.2% growth in normalised EBITDA to R10.0 billion. When including non-recurring restructuring costs from the previous year, reported EBITDA increased by 18.4%. Additionally, total adjusted headline earnings and adjusted basic EPS both grew by more than 100% to 376.0 cents and 385.5 cents, respectively. respectively, driven by improved operational performance.
From a loss position, adjusted profit for the year also increased by more than 100% to R1.9 billion, boosted by once-off restructuring costs and lower depreciation.
Cash generated from operations increased by more than R4 billion, excluding restructuring costs. Better-than-expected positive free cash flow of R424 million was driven by improved operational performance and a measured approach to capital expenditure.
"Group performance improved against a challenging economic backdrop in South Africa," says Telkom Group Chief Executive Serame Taukobong. "Our data-led strategy delivered ahead of industry trends. We invested R6.1 billion towards network resilience, expanding our mobile network, modernising our fixed network infrastructure and fortifying our skills and capabilities for ICT-managed services."
This investment included spectrum, which Telkom has deployed to further improve offerings to retail, enterprise, and wholesale customers. Progress was made on the Group's Value Unlock strategy through the proposed disposal of Swiftnet for R6.75 billion, which has been approved by shareholders.
Openserve saw revenue from next-generation, data-led products and services grow 7.4%, to 76.4% of Its total revenue. Openserve is South Africa's leading wholesale infrastructure connectivity provider and the country's largest open-access network. Revenue growth was driven by a 16.1% uptick in next-generation broadband connectivity (fibre to the home), while the enterprise and carrier segments grew by 4.8% and 2.5%, respectively.
Telkom Consumer increased external revenue by 2.2% to R26.1 billion, with external revenue from mobile operations up 4.5% to R22.6 billion, driven by 6.8% growth in mobile service revenue. Telkom Consumer grew mobile subscribers by 11.9% to 20.4 million in a highly competitive market. Mobile broadband subscribers grew 9.5% to 12.7 million, representing 62.3% of the total mobile base.
BCX, operating in a highly competitive market, kept gross revenue stable at R14.2 billion while reported revenue eased 2.3% to R12.9 billion after an accounting revision for agent versus principal contracts. Gross IT revenue grew 11.4% to R8.5 billion, driven by new product deals, software contract renewals, clearing prior-year backlogs in integration services, and record cross-border sales.
Gyro shifted its focus to managing the Group's property portfolio for core operational purposes, optimising the Telkom property footprint and improving energy efficiency. Disposal of properties no longer required generated R92 million.
Taukobong says the Group has built a good base from which to grow as a focused InfraCo, using its mobile and fixed networks and ICT capabilities. This will entail efficiently investing in mobile and fibre network businesses while expanding ICT capabilities anchored by data centres.
"The sale of the masts and towers business will strengthen the Group balance sheet and release cash flow for investment," says Taukobong. "This, together with our healthy operational performance, leaves us well positioned to continue our ambitious growth plans for our mobile and fixed-line connectivity businesses."
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