Telkom mobile business to miss March break-even target

Rising costs hold back the unit.
Telkom said its mobile business would miss a target of breaking even by March as a weak South African economy and rising costs holds back the unit.

“Our initial expectation that the mobile business would break even by March 2016 has been tempered by the operating environment and cost pressures,” the Pretoria-based company said in a statement on Monday. “We are, however, confident that we will maintain the current positive revenue growth witnessed in this part of our business.”

South Africa’s biggest fixed-line operator, about 40% owned by the government, is trying to grow its mobile business to offset falling use of landlines and boost its internet offering. The outlook for the company “remains challenging on the back of lower growth expectations, higher interest rates and rising inflation,” Telkom said.

Telkom shares declined 6.63% to R59.76 at close in Johannesburg, valuing the company at R33 billion ($2 billion). That extended the fall for the calendar year to 1.3%.

Revenue gained 7% to R7.2 billion in the three months through December, Telkom said. Operating expenses climbed 13% while mobile-data revenue was up 56%. The company extended its debt-maturity profile by raising a R1 billion term loan.

©2016 Bloomberg News

COMMENTS   0

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: