Telkom profit dives

Telkom has reported a 36% drop in first-half profit as it struggles with tough competition and burdensome costs from its new mobile arm.

Telkom, which is in talks to sell a 20% stake to South Korea's KT, said headline earnings from continuing operations totalled 191.7c per share in the six months to end-September, compared with a restated 297c a year earlier.

Including discontinued operations, headline earnings fell by nearly 84%.

Operating revenue totalled R16.4-billion, down 3.2% from a year earlier, the company said.

It said it expects capital spending to total as much as 20% of revenue for the year.

Telkom has been fighting to rein in costs and return to growth after being hit by the decline in traditional telephony and a costly failed expansion plan in Nigeria.

Telkom finalised the sale of its Nigerian unit last month, for a net loss of R1-billion. That loss will be reflected in the second half of the financial year.

It said it was in talks to sell a 20% stake to KT for about $600-million.