Telkom FY23 revenue flat

Telkom, a leading telecommunications company, recently reported a decrease in headline earnings by 76.5 per cent for the year ended 31st March 2023. Despite this decline, the company saw a slight increase in revenue by 0.9 per cent, attributed to the migration of revenues from legacy to newer technology, investments in the mobile post-paid base, and the impact of sustained load shedding putting pressure on operating costs. To delve deeper into the financial performance and operational challenges faced by Telkom, Serame Taukobong, Group CEO at Telkom, joined CNBC Africa for an exclusive interview. Taukobong shed light on the various cost pressures that impacted the company's profitability and operational environment. He highlighted the significant cost incurred due to load shedding, amounting to 605 million, which has put substantial pressure on the company's bottom line. The widespread load shedding has also affected consumers, forcing them to make difficult choices such as prioritizing transportation expenses over other essential needs. In terms of divisional performance, Taukobong emphasized the positive growth seen in the next-generation network segment, counterbalancing the declines in legacy networks. Despite the higher margin associated with legacy networks, Telkom remains dedicated to leveraging next-generation platforms to drive growth and revenue. The CEO also discussed the substantial capital expenditure (Capex) investment in next-generation revenues and expressed optimism about reaching a break-even point in the near future. Regarding BCX, the business arm that faced challenges in the past year, Taukobong highlighted the strategic acquisitions and partnerships made to drive growth. He emphasized the importance of forging new partnerships and expanding service offerings to key customers to enhance revenue generation within BCX. When questioned about potential bids for the company, Taukobong mentioned a possible top-line price of around 100 Rand, considering the company's current valuation and impairment impact. The CEO also addressed the topic of dividends, indicating that the dividend policy revision links dividend payments to free cash flows. As Telkom aims to achieve positive free cash flow post the next financial year, dividend payments are expected to resume. Looking ahead, Taukobong outlined Telkom's outlook for the next period, emphasizing the company's position as an infracore ecosystem with valuable assets sought after by telecommunications and IT providers. He highlighted the potential for creating a cohesive OneTelco approach by integrating these assets more effectively. In conclusion, despite the challenges faced by Telkom, including cost pressures and the impact of load shedding, the company remains focused on leveraging next-generation technologies, strategic partnerships, and operational efficiencies to drive growth and enhance revenue streams in the upcoming period.