Telkom Sa Soc Ltd. · JSE:TKG
Telkom Sa Soc — H1 FY2018 Earnings Presentation
46 slides from Telkom Sa Soc's earnings presentation, November 2017
Slide 1: Group Interim Results for the six months ended 30 September 2017
Telkom SA SOC Limited Group Interim Results for the six months ended 30 September 2017
Slide 2: Contents
Operational data 2 Telkom group interim results 2017 3 Telkom SA SOC Limited (Registration number 1991/005476/30) Contents JSE share code: TKG ISIN: ZAE000044897 Special note regarding forward-looking statements Many of the statements included in this document, as well as verbal statements that may
Slide 3: Key indicators
Operational Group interim data results 2017 4 5 Key indicators Report structure Telkom provides fixed-line access and data communication services through Telkom South Africa and the mobile business offers mobile voice services, data services and handset sales through 20 237 0.6% 340.9 7.0% Telkom Mo
Slide 4: Overview of our business: Message from group CEO
7 Message from group CEO: Sipho Maseko 01 The first half of the year was characterised by the digital economy. Improved processes and a tough economic environment and increased efficiencies led to an increase in the connectivity competition. We saw corporate businesses defer rate of the homes passed
Slide 5: Financial capital
Overview of our business 8 Telkom group interim results 2017 9 Financial capital Investment for future growth Capex increased 9.2 percent to R 3 974 million Openserve continued the investment in the Salient features with capex to revenue of 19.8 percent in line with fibre market underpinned by our s
Slide 6: Financial capital (continued)
Overview of our business 10 Telkom group interim results 2017 11 Financial capital continued Strong balance sheet to fund future growth Despite the increase in net debt, including financial assets and liabilities to R7 562 million from R3 428 million as at 30 September 2017, our group’s capital stru
Slide 7: Productive capital: Openserve investing in the broadband ecosystem
Overview of our business 12 Telkom group interim results 2017 13 Productive capital Openserve investing in the broadband ecosystem In our endeavour to build and lead in the communication infrastructure market, we continue to provide the foundation for enabling a connected future for all South Africa
Slide 8: Productive capital: BCX revenue performance
Overview of our business 14 Telkom group interim results 2017 15 Productive capital continued BCX revenue performance impacted by tough economic environment Revenue performance was negatively impacted by the poor economic conditions in South Africa. A higher level of fiscal restraint in South Africa
Slide 9: Productive capital: Mobile growth trajectory
Overview of our business 16 Telkom group interim results 2017 17 Productive capital continued Mobile growth trajectory boosted the performance of the Consumer business Telkom Consumer performance was driven by the mobile business as the investment in capex yields impressive returns. Mobile service r
Slide 10: Productive capital: Gyro property portfolio
Overview of our business 18 Telkom group interim results 2017 19 Productive capital continued Gyro established to monetise the property portfolio for long-term returns Gyro was established on 1 April 2017 to unlock value by commercialising the property portfolio, extract value from excess building c
Slide 11: Productive capital: Trudon driving digitalisation
Overview of our business 20 Telkom group interim results 2017 21 Productive capital continued Trudon driving digitalisation Trudon continues to enhance its OTT partnership capabilities through partnerships with global players building compelling digital products aimed at helping businesses generate
Slide 12: Human capital and Intellectual capital
Overview of our business 22 Telkom group interim results 2017 23 Human capital Intellectual capital Focusing on our people IT systems supporting customer experience We continued to implement our IT strategy throughout Telkom, which Having the right talent in the right place at the right time drives
Slide 13: Social and relationship capital
Overview of our business 24 Telkom group interim results 2017 25 Social and relationship capital Generating societal value Telkom is committed to improving its B-BBEE level in 2018 and has solutions with our customers. We are opening invitation only basis to 200 select technology the doors of our ma
Slide 14: Natural capital and Outlook
Overview of our business 26 Telkom group interim results 2017 27 Natural capital Outlook Investing in renewable natural resources Our 3 MW grid-tied solar PV plant continues to generate 90% of our head office Looking forward, we will continue to seek a sustainable growth framework campus daytime ene
Slide 15: Outlook: Dividend policy and declaration
Overview of our business 28 Telkom group interim results 2017 29 Outlook continued Dividend policy Our policy is to pay an annual dividend of 60 percent of headline earnings with an interim dividend of 40 percent of interim headline earnings. Declaration of dividend In line with our dividend policy
Slide 16: Operational data
Operational data 30 Telkom group interim results 2017 31 02 Operational data
Slide 17: Operational data
32 Telkom group interim results 2017 33 Operational data September September September September 2017 2016 % 2017 2016 % Subscribers Group employees 5 18 522 19 021 (2.6) Broadband subscribers1 999 311 1 018 405 (1.9) Telkom company employees6 10 050 12 184 (17.5) Mobile broadband subscribers 2 848
Slide 18: Financial performance
O53 Financial performance
Slide 19: Group operating revenue
36 Telkom group interim results 2017 37 Financial performance Group operating revenue Revenue drivers September September 2017 2016 Group operating revenue decreased 0.6 percent to R20 109 million (September 2016: Rm Rm % R20 237 million), driven by a 6.1% decline in fixed line service revenue to R1
Slide 20: Group direct and operating expenses
Financial performance 38 Telkom group interim results 2017 39 Financial performance continued Group direct expenses Group operating expenses September September September September 2017 2016 2017 2016 Rm Rm % Rm Rm % Payments to other operators 1 172 1 274 8.0 Employee expenses 5 360 5 360 - Cost of
Slide 21: Operating expense drivers and taxation
Financial performance 40 Telkom group interim results 2017 41 Financial performance continued Taxation Operating expense drivers The reported tax expense increased by 10 percent to R594 million (September 2016: R540 million). Group operating expenses including depreciation, amortisation, impairments
Slide 22: Annexure B: Telkom statement of profit or loss
Financial performance 42 Telkom group interim results 2017 43 Annexure B Below are the results of Telkom for the six month period ended 30 September 2017 (before inter- group eliminations). The prior period was adjusted to exclude Enterprise. Statement of profit or loss September September 2017 2016
Slide 23: Condensed consolidated interim financial statements
Operational data 44 Telkom group interim results 2017 45 Condensed consolidated 04 interim financial statements Auditors’ Review Report Condensed consolidated interim 46 Notes to the condensed consolidated 52 statement of profit or loss and other interim financial statements Our joint auditors, Erns
Slide 24: Condensed consolidated interim statement of profit or loss and OCI
Condensed consolidated interim financial statements 46 Telkom group interim results 2017 47 Condensed consolidated interim statement of profit or loss and other comprehensive income for the period ended 30 September 2017 Reviewed Restated* Reviewed Restated* Six months Six months Six months Six mont
Slide 25: Condensed consolidated interim statement of financial position
Condensed consolidated interim financial statements 48 Telkom group interim results 2017 49 Condensed consolidated interim statement of financial position at 30 September 2017 Reviewed Reviewed Six months Audited Six months Audited ended Year ended ended Year ended 30 September 31 March 30 September
Slide 26: Statements of changes in equity and cash flows
Condensed consolidated interim financial statements 50 Telkom group interim results 2017 51 Condensed consolidated interim Condensed consolidated interim statement of changes in equity statement of cash flows for the six months ended 30 September 2017 for the six months ended 30 September 2017 Revie
Slide 27: Notes: Corporate information and basis of preparation
Condensed consolidated interim financial statements 52 Telkom group interim results 2017 53 Notes to the condensed consolidated interim financial statements for the six months ended 30 September 2017 1. Corporate information 2. Basis of preparation and accounting policies (continued) Telkom SA SOC L
Slide 28: Notes: Basis of preparation (continued)
Condensed consolidated interim financial statements 54 Telkom group interim results 2017 55 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 2. Basis of preparation and accounting policies (continued) 2. Basis of preparation and
Slide 29: Notes: Adjustments to profit or loss for prior period
Condensed consolidated interim financial statements 56 Telkom group interim results 2017 57 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 2. Basis of preparation and accounting policies (continued) Group 2.2 Adjustments to the
Slide 30: Notes: Adjustments to statement of changes in equity
Condensed consolidated interim financial statements 58 Telkom group interim results 2017 59 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 2. Basis of preparation and accounting policies (continued) Group 2.3 Adjustments to the
Slide 31: Notes: Segment information
Condensed consolidated interim financial statements 60 Telkom group interim results 2017 61 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 3. Segment information The executive committee (Exco) is the group’s chief operating dec
Slide 32: Notes: Segment information, September 2017
Condensed consolidated interim financial statements 62 Telkom group interim results 2017 63 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 3. Segment information (continued) Openserve Consumer BCX Other Consolidated Rm Rm Rm Rm
Slide 33: Notes: Segment information, September 2016
Condensed consolidated interim financial statements 64 Telkom group interim results 2017 65 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 3. Segment information (continued) Openserve Consumer BCX* Other Consolidated Rm Rm Rm R
Slide 34: Notes: Total revenue and operating expenses
Condensed consolidated interim financial statements 66 Telkom group interim results 2017 67 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 4. Total revenue Reviewed Reviewed 5. Operating expenses (continued) Reviewed Restated*
Slide 35: Notes: Taxation and earnings per share
Condensed consolidated interim financial statements 68 Telkom group interim results 2017 69 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 6. Taxation Reviewed Restated* 7. Earnings per share Reviewed Restated* Six months Six m
Slide 36: Notes: Capital additions and other investments
Condensed consolidated interim financial statements 70 Telkom group interim results 2017 71 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 8. Capital additions and disposals Reviewed 10. Other investments and financial assets R
Slide 37: Notes: Inventories, cash and deferred taxation
Condensed consolidated interim financial statements 72 Telkom group interim results 2017 73 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 11. Inventories Reviewed 13. Deferred taxation Reviewed Six months Audited Six months Au
Slide 38: Notes: Financial risk management
Condensed consolidated interim financial statements 74 Telkom group interim results 2017 75 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 14. Financial risk management The estimated net fair values as at the reporting date hav
Slide 39: Notes: Fair value hierarchy and disposals
Condensed consolidated interim financial statements 76 Telkom group interim results 2017 77 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 14. Financial risk management (continued) 15. Acquisition and disposal of subsidiaries 1
Slide 40: Notes: Acquisition and disposal of subsidiaries
Condensed consolidated interim financial statements 78 Telkom group interim results 2017 79 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 15. Acquisition and disposal of subsidiaries (continued) 15. Acquisition and disposal of
Slide 41: Notes: Provisions and commitments
Condensed consolidated interim financial statements 80 Telkom group interim results 2017 81 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 17. Provisions Reviewed 19. Commitments Reviewed Six months Audited Six months Audited e
Slide 42: Notes: Contingencies and related parties
Condensed consolidated interim financial statements 82 Telkom group interim results 2017 83 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 20. Contingencies (continued) 21. Related parties (continued) Reviewed Reviewed Six mont
Slide 43: Notes: Related parties and significant events
Condensed consolidated interim financial statements 84 Telkom group interim results 2017 85 Notes to the condensed consolidated interim financial statements (continued) for the six months ended 30 September 2017 21. Related parties (continued) Reviewed Reviewed 22. Significant events and transaction
Slide 44: Today's presentation
Condensed Overview ofconsolidated our business interim financial statements 86 05 Today’s presentation
Slide 45: Notes
Today’s presentation 88 Telkom group interim results 2017 89 Notes: Notes:
Slide 46: Slide 46