Telkom earnings plummet

TELKOM'S first-half profit plummeted, the fixed-line phone company said yesterday.

TELKOM'S first-half profit plummeted, the fixed-line phone company said yesterday.

Headline earnings per share from continuing operations decreased by 37,9% to 242,2c for the six months ended September 30, the group said.

The impact of competition and the weaker economic environment were evident in the results, said chief executive Reuben September.

"Our strategy seeking to reposition the Telkom Group is imperative given the tough operating environment.

"Similar to the strategies of other leading operators in the world, we are focusing on building other revenue streams to compensate for the decline in fixed-voice revenues."

September said Telkom was expanding into other geographic markets and into other domestic markets, "for example our data centre operations and mobile strategy".

Telkom was strongly focused on reducing its costs to protect its profits. "We remain committed to a 10% reduction in operating expenses by the 2011-12 financial year. While control of discretionary expenditure is showing immediate reduction, other areas require careful planning and execution to ensure long-term success."

These areas included supplier negotiations, improved inventory management, IT costs, maintenance costs and synergies through mobile capabilities and data centre operations.

The reorganisation of Telkom SA into new business units was 85% complete, September said.

Specific work streams were focused on business process engineering and cost efficiencies.

He said Telkom's Nigerian business Multi-Links remained a major concern, but was beginning to show slight improvements in its operating performance.

He said the integration of Africa Online and MWEB Africa was proceeding well. - Sapa