Telkom share price gains after delivering strong results
Telkom reveals revenue growth of 1.6% to R43 billion as HEPS jumps more than 100%
Key Takeaways:
- Telkom group revenue increased by 1.6% to R43 230 million for the financial year ending 31 March 2024.
- Total headline earnings per share and basic earnings per share increased by more than 100% to 376.0 cents and 385.5 cents, driven by improved operational performance.
- Openserve revenue increased by 10.7% to R4 526 million, continuing its success in the fixed wholesale connectivity market.
- Telkom’s masts and towers build programme gained momentum during the financial year with 68 towers and eight in-building solution sites constructed.
- The group is looking to pay out a dividend of 30% to 40% of free cash flow.
Financial Performance Highlights
Telkom delivers strong results as group revenue increased by 1.6% to R43 230 million for FY24. The successful performance was driven by an increase in mobile data and next-generation NGN fibre data connectivity revenue of 10.6% and 14.5%, respectively. The group delivered a stronger operational performance and improved financial results despite a challenging economic backdrop in South Africa as well as inflationary pressures and the additional operating cost resulting from power outages in South Africa.
Total headline earnings per share and basic earnings per share increased by more than 100% to 376.0 cents and 385.5 cents. This was driven by improved operational performance.
Openserve continued its success in the fixed wholesale connectivity market as it increase its external channel revenue by 10.7% to R4 526 million. Telkom Consumer continued to deliver high-speed broadband solutions across both the mobile and fibre segments with external revenue increasing by 2.2% to R26 140 million. Total external revenue from Mobile operations increased by 4.5% to R22 583 million. This was primarily due to mobile data revenue, which increased by 10.6%.
IT revenue increased by 9.9% to R7 262 million mainly due to a strong performance from both the hardware and software business. Telkom’s masts and towers build programme gained momentum during the previous financial year with 68 towers and eight in-building solution sites constructed, resulting in 4 047 total productive towers.
Market Outlook
Looking forward, the group’s short to medium-term priorities are to strengthen its balance sheet though paying down debt and investing in capital expenditure to drive future growth. In terms of a dividend payout, the board has proposed a payout range of 30% to 40% of free cash flow after taking into account capital expenditure investments.
Telkom share price has been in a consolidating phase since mid-April this year. Traders looking for a long position might wait for a daily close above the 2528 resistance level before targeting a move towards the 2940 resistance level. Should price break below the trend line, this trade can be considered invalid.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
