Telkom SA Boosts Revenues

PRETORIA, South Africa -- Telkom has delivered on its strategy of driving earnings growth for the six months ended 30 September 2003, with an expansion of 6% EBITDA margins to 37.8 percent. The balance sheet strengthened with net debt to equity down to 85.1 percent, from 123.4 percent in the previous period.

Interim headline earnings per share rose 171.1 percent to 335.9 cents per share, compared to 123.9 cents in the previous period. Group earnings increased due to revenue growth in selected markets by expanding integrated product and service offerings as well as increased profitability and cash flows through strict cost discipline. Group revenue increased 9.8 percent to R20, 110 million (30 September 2002: R18, 316 million). A once-off interim dividend of 90.0 cents per share was declared.

The fixed-line segment delivered solid revenue growth with margin expansion, resulting in good earnings growth. The fixed-line segment revenue growth was driven largely by data volume growth, which grew 17.1 percent. Capital expenditure has been further reduced, with future investments focused in areas that drive revenue growth and efficiencies.

Value-added services penetrated 58 percent of the residential customer base. ADSL gained momentum with 11 522 customers at September 2003.

Telkom would also continue its strategy of becoming the data service provider of choice with several new products launched such as VPN Supreme, a dedicated IP service, CyberTradeMall and TelkomInternet powered by satellite.

Telkom’s joint venture Vodacom increased its revenue by 19.6 percent, and expanded its EBITDA margins to 32.7 percent. Customer uptake grew by 19.5 percent and the lowest ever churn rate for its contract customers of 10.8 percent in the South African market was recorded. Vodacom is due to launch as the second licensed mobile operator in Mozambique in December 2003.

Sizwe Nxasana, the Chief Executive Officer of Telkom, said: "Going forward, the Telkom group believes it is well-positioned to deliver shareholders returns by focusing on remaining competitive and ensuring increased operational efficiencies and productivity. Customer retention remains a key priority for the group. The Telkom Group will also continue to tap into exciting opportunities that exist in all markets, especially the rest of the African continent."

Telkom SA Ltd.