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Telkom South Africa cuts 12.5% jobs after 22.6% earnings surge

Telkom, which runs South Africa’s biggest fixed-line telecom network, had 15,296 permanent jobs on March 31

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Telkom South Africa cuts 12.5% jobs after 22.6% earnings surge

South Africa’s Telkom SA has cut 12.5% of the group’s permanent jobs, after posting a 22.6% surge in full-year earnings as upbeat performance in its mobile business offset declines in the traditional fixed-line unit.

Telkom, which runs South Africa’s biggest fixed-line telecom network, says the group had 15,296 permanent jobs on March 31, down from 17,472 in the year ending March 2018 due to voluntary severance packages, voluntary early retirement packages and other layoffs under the country’s labour law. 

Some job cuts came from Telkom’s information and communications technology business BCX, where the number of permanent employees fell 13.4% to 5,782 under a cost reduction programme. 

“We expect the savings from this programme to come through in the next financial year”, Telkom said in its result statement. 

At 0806 GMT, shares in Telkom were down 1.43% to 85.22 rand ($5.90)

Headline earnings per share (HEPS), the main profit measure in South Africa, came in at 722.4 cents for the year until the end of March compared with 589.3 cents a year earlier. 

HEPS excludes 728 million rand in costs from voluntary severance and retirement packages and layoffs related to section 189 of the labour law. 

Telkom, 40 per cent owned by the state, is seeking to transform the business with heavy investments in its mobile phone unit and by rolling out fibre internet packages. 

Mobile service revenue climbed 58.3% to 8.2 billion rand, while fixed service revenue fell 8.8%. 

“The significant growth in mobile service revenue was supported by an 85.9 percent growth in active subscribers to 9.7 million”, Chief Executive Officer, Sipho Maseko said.

Group earnings before interest, tax, depreciation, and amortization rose 8.5%, benefiting from the revenue growth of 5.3% and ongoing sustainable cost management, it said. 

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South Africa’s Vodacom plans sale of operations in five African markets

The company plans sale of holdings in Angola, Nigeria, Ivory Coast and Zambia

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South Africa's Vodacom plans sale of operations in five African markets

Vodacom, a branch of Vodafone Group Plc and operators of mobile phone services in Africa is selling its Business Africa operations. This comprises holdings in Angola, Nigeria, Ivory Coast and Zambia.

The company’s Angolan holdings is being sold to Internet Technologies Angola (ITA) while Synergy Communication (SynCom) will take over its Nigeria, Zambia and Ivory Coast businesses. Synergy Communications will partner with major global cloud providers and deliver platform-based services to both multinationals and local enterprises

SynCom will be taking over 100 per cent holding of the three African markets subject to regulatory approvals. The acquisition will boost SynCom’s coverage as it already has presence in Botswana, Malawi and Mozambique.

Vodacom on its part, says the operations and assets of its affected Business Africa units will be acquired by the new partners on confidential terms. In the year ended March 31, enterprise service revenue contributed 23 per cent to group service revenue for Vodacom, with 77 per cent of the revenue coming from consumer service. Vodacom also affirms that the agreements were subject to regulatory approvals across relevant markets.

Vodacom Group CEO, Shameel Joosub, says “the company is not exiting any of the territories related to the transactions and remains focused on continuing to deliver exceptional service to our global and multinational clients in these markets through long-term commercial agreements”

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Zimbabwe announces end to foreign currency use amidst spiraling inflation

President Emmerson Mnangagwa has promised to introduce a proper national currency soon

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Zimbabwe announces end to foreign currency use amidst spiraling inflation
John Mangudya, Governor of Reserve Bank of Zimbabwe, the central bank. (AFP)

Zimbabwe announced on Monday that it would abandon the use of foreign currencies which replaced the local dollar that was swiped out by hyperinflation ten years ago.

The country is facing another bout of sharply rising prices, with official inflation now at nearly 100 per cent — the highest since the hyperinflation era.

Zimbabwe’s central bank said in a statement that official legal tender would be only the two local currencies — bond notes and “RTGS” — that were introduced as US dollar banknotes dried up.

The US dollar, South African rand and other foreign currencies “shall no longer be legal tender alongside the Zimbabwe dollar in any transactions in Zimbabwe,” the bank said.

“Bond notes and RTGS dollars are at par with the Zimbabwe dollar.”

Bond notes were introduced in 2014, while electronic RTGS (Real Time Gross Settlement) dollars came earlier this year.

President Emmerson Mnangagwa has promised to introduce a proper national currency soon.

Related: Zimbabwe’s president, Emmerson Mnangagwa promises new currency

Bond notes and RTGS dollars have in theory been worth the same as US dollars, but have fallen sharply in value.

Zimbabwe’s economy has been in ruins since hyperinflation peaked at 500 billion per cent in 2009 under president Robert Mugabe.

Mnangagwa’s efforts to attract investment and create jobs have struggled since he came to power in 2017.

Related: Zimbabwe’s inflation soars, stocks hit record high

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Morocco’s Sole oil refinery struggles to stay afloat

A self-declared “national front” is leading the charge to salvage refining company SAMIR

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morocco's oil refinery SAMIR struggle for survival

Three years after it was liquidated for racking up billions of euros worth of debt, Morocco’s sole oil refinery and the one-time economic flagship is struggling to attract a buyer and survive. A self-declared “national front” – comprising employees, economists and union leaders – is leading the charge to salvage refining company SAMIR, while a trade court desperately seeks a new owner.

They face a tough battle, including a court deadline of July 18 to seal the refinery’s fate. The firm was liquidated in 2016 after it was unable to honour some four billion euros ($4.5 billion at current prices) in borrowing. The refinery was set up in 1959 by the Moroccan government and sold in 1997 to the Corral group, a Saudi-Swedish enterprise that holds a majority stake of more than 67 per cent.

Work at the refinery, which had a capacity of more than 150,000 barrels a day, had already wound down a year before it was dissolved. But nearly 800 employees remain on the payroll, albeit on slashed salaries scratched together from company coffers and creditors.

The workers’ fate now hangs in the balance, according to staff representative Houcine El Yamani, who has spearheaded efforts by the “national front” to salvage the facility. “We have made tremendous efforts” to pressure the state into reviving SAMIR since work stopped in 2015 at the plant in Mohammedia, between Rabat and the economic hub Casablanca, El Yamani said.

Such efforts include sit-ins and press conferences.  “We still have hope of finding a solution,” he added. A “national front” report submitted last year to Moroccan authorities denounced the 1997 privatisation of the refinery as a “big sham” and the sale to Corral as “totally lacking in transparency”.

“The Corral group did not respect any of the terms of the contract (including pledges to invest funds to develop the refinery), dragging the sole national refinery into an infernal spiral,” said the report. The drop in global oil prices in 2014 affected SAMIR, but the “national front” says bad management was the main factor behind the firm’s woes, as debts mounted and attempts to satisfy creditors failed.

Sold to scrap

After its liquidation in March 2016 by a Casablanca court, a committee of trustees was set up to find a buyer and safeguard jobs for employees. “Around 30 international groups showed an interest,” but nothing materialised, El Yamani said.

The “national front” also said the government could have been more pro-active. “In the absence of any government action, the refinery’s assets risk being sold to scrap by the kilogramme,” the coalition of employees, economists and union leaders said in its report.

Minister of Energy and Mines, Aziz Rebbah, dismissed claims that the government has no interest in salvaging the oil refinery. “We have nothing against it,” he said. “If a buyer comes forth we will examine the proposal,” he added. Morocco is totally dependent on oil imports and the winding up of SAMIR’s operations has left the North African country more reliant than ever on imports of refined oil products.

A report earlier this year by the International Energy Agency noted that “the closure of the country’s only refinery… has clear implications for the security of oil supply” in Morocco. The court that liquidated SAMIR three years ago has extended a deadline to keep the refinery open a dozen times.

The last extension expires on July 18, when SAMIR will know if it has a buyer or if it will be sold “in bits and pieces”, according to Moroccan media reports. As the battle for SAMIR’s survival plays out, another legal fight is underway between the refinery’s main shareholder, Saudi-Ethiopian billionaire Mohammed Al Amoudi, and the government.

Al Amoudi – who was arrested in Saudi Arabia in 2017 as part of a vast anti-corruption campaign – is demanding $1.5 billion in compensation from Morocco over SAMIR’s demise, according to Moroccan news website Media24.

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