Weak electricity shortages hit South Africa’s Telkom Q3 profit | – #Weak #electricity #shortages #hit #South #Africas #Telkom #profit

JOHANNESBURG, Feb 14 (Reuters) – South African telecoms group Telkom ( TKGJ.J ) said on Tuesday that core profit fell 13.5% in the third quarter as power outages hit inflated costs and service revenue.

The operator also announced a cost-cutting program to improve profits, sending its shares up 6.33% by 0921 GMT.

State electricity utility Eskom is carrying out the worst blackouts, or “load shedding”, to households per day 10 hours in the dark, disrupting production and harming business.

The telecommunications industry must run diesel generators to power its large towers, deploy additional batteries, and increase security at these sites to protect them from theft, an added expense.

State-owned Telkom reported interest in the third quarter ended Dec. 31, tax2.5 of group profit before depreciation and amortization (EBITDA). billion rand (140,10 million USA dollars) and the EBITDA margin decreased by 4.1 percentage points to 22.6 percent. %.

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Group revenue increased by 2.3% to 11 billion rand, which was mainly due to the growth of active subscribers, increased data traffic, high sales of phones and equipment to retail, as well as an increase in IT solutions and products to enterprise customers.

Group CEO Serame Taukobong said despite good top-line growth and optimization of roaming costs, the migration of legacy products to newer technologies, subsequent investment in the pay system and the impact of power outages are putting pressure on its costs, EBITDA and cash flow.

The power outages cost over 150 million rand ($8.41 million) year-on-year in additional costs for the quarter dollars) resulted in a large increase.

Taukobong said Telkom has embarked on cost-saving programs to cope with these costs and improve the group’s medium-term profitability, with the benefits expected to materialize over the next 6 to 18 months.

($1 = 17.8439 rand)

Reporting by Nqobile Dludla; Edited by Robert Birsel

Our standards: Thomson Reuters Trust Principles.

2023-02-14 16:50:32
Source – reuters

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