Newsdeck

South Africa’s Telkom cuts 12.5% jobs, mobile boosts profit

By Reuters 27 May 2019
Caption
Photo by Paweł Czerwiński on Unsplash

JOHANNESBURG, May 27 (Reuters) - South Africa's Telkom SA has cut 12.5% of the group's permanent jobs, it said on Monday after posting a 22.6% surge in full-year earnings as upbeat performance in its mobile business offset declines in the traditional fixed-line unit.

Telkom, which runs South Africa’s biggest fixed-line telecom network, said the group had 15,296 permanent jobs on March 31, down from 17,472 in the year ending March 2018 due to voluntary severance packages, voluntary early retirement packages and other layoffs under the country’s labour law.

Some job cuts came from Telkom’s information and communications technology business BCX, where the number of permanent employees fell 13.4% to 5,782 under a cost reduction programme.

“We expect the savings from this programme to come through in the next financial year,” Telkom said in its result statement.

At 0806 GMT, shares in Telkom were down 1.43% to 85.22 rand ($5.90).

Headline earnings per share (HEPS), the main profit measure in South Africa, came in at 722.4 cents for the year until the end of March compared with 589.3 cents a year earlier.

HEPS excludes 728 million rand in costs from voluntary severance and retirement packages and layoffs related to section 189 of the labour law.

Telkom, 40 percent owned by the state, is seeking to transform the business with heavy investments in its mobile phone unit and by rolling out fibre internet packages.

Mobile service revenue climbed 58.3% to 8.2 billion rand, while fixed service revenue fell 8.8%.

“The significant growth in mobile service revenue was supported by an 85.9 percent growth in active subscribers to 9.7 million,” Chief Executive Officer Sipho Maseko said.

Group earnings before interest, tax, depreciation and amortization rose 8.5%, benefiting from the revenue growth of 5.3% and ongoing sustainable cost management, it said.

($1 = 14.4111 rand) (Reporting by Nqobile Dludla Editing by Sherry Jacob-Phillips and Edmund Blair) DM

Gallery

In other news...

The South African economy is choking harder than the Proteas. Although to be choking you have to actually be eating and the Proteas seem to be on some sort of juice cleanse-like fast…*

Back to the economy: In the first quarter the GDP dive-bombed by a whopping 3.2%. The sense of futility can paralyse us into inaction and moaning. But it’s times like these that call for effort and action, no matter how small. Yes, South Africa is hurting. Yes the ravaged economy is evident everywhere you look. But you can make a difference, in your own personal way and by supporting independent media like Daily Maverick. We’ve pledged to continue the fight through producing incisive and impactful investigations and analysis, the same way we have done every day for the last decade.

By becoming a Maverick Insider you can help us keep doing what we do, so that you and others who can’t afford it, can keep reading the truth. For whatever amount you choose, you can support DM and it only takes a minute.

Support Daily Maverick→Payment options

*Proteas, you know we love you. We’d just love you more if you won occasionally...


Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or if you are already an Insider.

DAYS OF ZONDO

‘King of Corrupt People’ points fingers at Ramatlhodi and perhaps even at President Cyril Ramaphosa

By Ferial Haffajee

SPOTLIGHT

SIU to investigate contracts with Buthelezi EMS

Marcus Low & Anso Thom for SPOTLIGHT 7 hours ago

"The real problem of humanity is the following: we have paleolithic emotions; medieval institutions; and god-like technology" ~ Edward Wilson