Telkom expects big jump in earnings

 ·15 Nov 2023

Telecoms group Telkom says it expects a positive turn for its interim period, with an anticipated growth in earnings per share of between 45% and 55%.

In a trading update ahead of its results, the group notified shareholders that it expects both earnings and headline earnings to have increased in the six months ending September 2023.

This follows a staggering loss of R10 billion posted in its most recent full-year results.

The group attributed the increase in earnings to improved performance for the period, with both revenue and EBITDA growth within the guidance provided at the annual financial results presentation for the year ended 31 March 2023.

“Growth in earnings has also been positively impacted by lower depreciation after asset impairments recognised in FY2023,” it said.

“This has been partially offset by higher net finance charges in H1 FY2024 as well as the non-recurrence of a R102 million gain on foreign exchange and fair value movements recognised in H1 FY2023.”

Other factors at play include total depreciation, amortisation and write-offs decreasing by approximately 20% from R3.55 billion in the prior period and net finance charges increasing by approximately 50% from R655 million in the prior period – largely due to lending rate increases as well as a higher net debt balance, Telkom said.

The difference between BEPS and HEPS is due to the net impact of impairment of assets and profit/loss on sale of assets.

The group noted that it has also restated the headline earnings from the prior period, which were overstated.

“On 30 September 2022, the group correctly calculated and accounted for tax in the group statement of profit or loss and other comprehensive income. However, the group incorrectly adjusted for the headline earnings, relating to the Profit on disposal and impairment of property, plant and equipment and intangible assets,” it said.

This led to a R21 million overstatement of headline earnings and a 4.3c overstatement of HEPS for the period ended 30 September 2022.

Earnings30 Sept 202230 Sept 2023% changeCents p/share
Basic earnings131.6190.8 – 204.045% – 55%59.2 – 72.4
HEPS (restated)132.9186.1 – 199.440% – 50%53.2 – 66.5
HEPS (reported)137.2185.2 – 198.935% – 45%48.0 – 61.7
Numbers in cents

Telkom will report its interim results on or around 21 November 2023.

Read: Load shedding piles on the pressure at Telkom

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