Report
EUR 15.00 For Business Accounts Only

South Africa: Telkom SA H1 17A - first take


  • ​Overall a good set of results but mostly expected given the guidance provided in the trading statement issued late October.
  • Operating revenue came in slightly below (-2.8%) our estimate mainly as a result of the poorer than expected revenue from BCX, which was negatively impacted by the macro environment.
  • Group EBITDA was impacted positively by strong cost efficiencies and a positive EBITDA contribution from mobile.
  • A significant acceleration in FTTH deployment with homes passed increasing from 81k in FY 16A to 144.5k (Telkom was targeting 150k) – conversion rate of 13%.
  • The Operations Support System and Business Support System (OSS/BSS) stack upgrade has been completed and the migration of customers onto the new system has commenced.
  • The mobile segment has achieved EBITDA profitability of ZAR214m.

Underlying
Telkom SA SOC Ltd.

Telkom SA SOC is a technology company. Co.'s services and products include: Fixed-line retail voice services to post-paid, pre-paid and private payphone customers; Fixed-line customer premises equipment rental, sales and services both voice and data needs; Interconnection services; Fixed-line data services, including domestic and international data transmission services; Data center operations which includes e-commerce, application service provider, hosting, data storage, e-mail and security services; W-CDMA, a 3G next generation network; Mobile communication services, including voice services, data services and handset sales and; Other services including directory services.

Provider
Arqaam Capital
Arqaam Capital

Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa. 

Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research. 

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