Telkom earnings gain as S African operator cuts jobs

Pretoria / Bloomberg

Telkom SA SOC Ltd. said full-year earnings gained 16 percent as South Africa’s biggest landline provider cut almost 4,000 jobs, raised the dividend and embarked on the last financial year of its turnaround plan.
Earnings before interest, taxes, depreciation and amortization was 11 billion rand ($729 million) in the year through March, compared with 9.4 billion rand the previous year, the Pretoria-based company said in a statement on Monday. Operating revenue gained 14 percent to 37.3 billion rand. The business offered severance and retirement packages to 3,878 employees during the year, at a cost of 2.2 billion rand.
“This financial year marks the end of the turnaround phase of our business,” Chief Executive Officer Sipho Maseko said in the statement. ““Our strong performance demonstrates the sound execution capability we have developed over this turnaround journey and lays a solid foundation for future growth.”
Maseko has been trying to reduce costs by cutting jobs as consumers switch to data-enabled smartphones and tablets from landlines. The company, almost 40 percent owned by the South African government, is also trying to increase profit at its mobile service, South Africa’s fourth-biggest, and boost sales of its internet offering.
Telkom shares gained 8.2 percent, set for the biggest gain since November, to 64.90 rand as of 9:45 a.m. in Johannesburg, the highest since Dec. 29. That almost wiped out share declines this year, valuing the company at 34 billion rand.
Telkom will pay a dividend of 2.70 rand a share, up 10 percent on the previous year.