South Africa’s Telkom half-year profit jumps on lower depreciation cost

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Telkom (TKGJ.J), the third-largest telecom firm in South Africa, announced on Tuesday a 46.7% increase in half-year earnings, driven by a decrease in depreciation charges and a rise in core profit.

The government-owned Telkom said that its headline earnings per share, or profit indicator, increased from 1.33 rand to 1.95 rand in the six months ending September 30.

Group revenue increased 2.5% to 21.8 billion rand ($1.19 billion), according to Telkom, with growth in the IT sector, monetizing fiber rollouts, and increased mobile traffic driving the increase.

Value-compelling offers helped Telkom see strong growth in its mobile service revenue; overall external revenue from mobile operations increased 4.1% to 11 billion rand.

Because of the increase in fixed data revenue, Openserve’s “next-generation” revenue growth in its fiber business was 6.9%.

As consumers want faster internet for richer content, Telkom has been investing in moving users from copper-based infrastructure to faster technologies like fiber and LTE.

Without providing any information, Telkom stated that its cost-cutting measures increased operational expenses by 2.4% and largely offset inflationary pressures. It also added that lower depreciation charges increased its profit.

Group earnings before interest, tax, depreciation, and amortization increased by 1.7% to 5 billion rand, according to Telkom, despite the increased operational costs.

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