Telkom rallies on bargain hunting
Telkom’s shares rallied on the JSE on Tuesday (12 June), adding more than 4% in afternoon trade amid bargain hunting.
Telkom gained 79 cents or 4.13% to R19.90 by14:00 local time, recovering a large portion of the 6% it lost on Monday.
The group has lost almost 45% of its share price from a year ago, trading at R36 over the same period in June 2011, while its market cap has slumped to just over R10 billion.
The All Share Index traded 0.18% higher to 33,677 points.
“We are seeing some bargain hunting taking place. News also came through yesterday that Telkom will be dropped from Satrix DIVI portfolio, and as a result, shares in the group took a pummelling,” a local trader told BusinessTech.
The Satrix DIVI portfolio invests in the FTSE/JSE Dividend Plus Index and consists of 30 companies, selected from the JSE Top 40 and Mid-Cap indices, that are expected to pay the best normal dividends over the forthcoming year.
On Friday, Telkom reported a decline in operating revenue to R33.1 billion, for the year ended March 2012.
Headline profit for the year fell 32.8% to R1.658 billion, while profit after tax for the year declined 93% to R179 million.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) of R8.5 billion, declined 8.8% and group EBITDA margin decreased to 25.8% from 28.1%.
Headline earnings per share decreased 33.0% to 324.7 cents per share and basic earnings per share decreased 97.8% to 10.4 cents.
The group decided against a dividend declaration in respect of the financial year ended 31 March 2012.
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