Analysts have highlighted that several South African companies are trading at massive discounts to their real value, depriving shareholders a much higher return on their investments. This is mainly due to complex structures in which the companies are held by the owners.
Among them are media and internet giant Naspers Ltd, Africa Rainbow Capital Investments Ltd, RMB Holdings Ltd, Brait SE and Telkom SA SOC Ltd.
"Shares in Telkom are trading at a 40-50% discount to its intrinsic value," Group CEO Sipho Maseko told Reuters.
Telkom, South Africa's third biggest mobile service provider with 13.7 million subscribers, was trading at 31.79 rand per share, down 2.05%, at 0930 GMT, and internal calculations reveal its per share price should be around 60 rand, he said.
Telkom is looking at either spinning off its individual businesses and listing them separately, or bringing in strategic or financial partners such as pension funds, Maseko said.
The first on the list will be its tower and masts business, which is at an advanced stage of finalisation and investors have been sounded out on the strategy. Next will be Openserve, its wholesale open access network and fibre infrastructure, followed by data centre operations and property disposals.
"One of the key strategic thrusts is to unlock the value embedded in the company over the next 3-5 years," Maseko said.
The partly state-owned landline and mobile operator said its headline earnings per share, the main profit measure in South Africa, rose by 25.4% to 2.19 rand ($0.1421) in the six months ended Sept. 30 from 1.74 rand in the comparable period last year.
Its revenue was down marginally by 0.4% for the half year to 21.4 billion rand.
($1 = 15.4157 rand)
(Reporting by Promit Mukherjee; Editing Olivia Kumwenda-Mtambo, Muralikumar Anantharaman and David Evans)
By Promit Mukherjee
