Telkom warns of earnings drop
Telkom has advised that it expects headline earnings per share for the six months ended September 2014, to be at least 20% lower than in 2013.
“The expected decrease in the results for the 2015 interim reporting period is due to the net curtailment gain of R2.2 billion recognised on the post retirement medical aid liability in the prior corresponding period,” the group said in a statement.
Excluding the R2.2 billion gain in the six months ended September 2013, the group said that basic earnings per share for the 2015 interim reporting period would have been at least 20% higher than the prior corresponding period.
“The increase is mainly attributable to lower payments to other operators resulting from the decrease in mobile termination rates and lower asset write offs,” it said.
For the period ended September 2013, Telkom reported HEPS of 224.2 cents per share, with BEPS of 140.6 cents per share.
Operating revenue was at R16.192 billion for that period.
The group also advised that it remains in discussions with MTN South Africa regarding the potential extension of their existing roaming agreement.
The deal would include bilateral roaming and outsourcing of the operation of Telkom´s radio access network, “which if successfully concluded may have a material effect on the
price of Telkom´s securities”, the group said in a statement on Friday (10 October).
“The parties will update shareholders as soon as they receive the appropriate legal and regulatory approvals.”
MTN signed an agreement with Telkom in March 2014, which would see it take over financial and operational responsibility for the rollout and operation of Telkom’s radio access network (RAN).
In April, Telkom said it hoped to conclude the deal within three-to-four months, however, last month Cell C told the South African Competition Commission that it is opposed to a network-sharing deal between MTN and Telkom.
This is according to a report by Bloomberg, who quoted Cell C CEO Jose dos Santos as saying that “As Cell C understands the proposed transaction, we do not agree with it”.
The group’s interim results will be published on about 17 November 2014.
More on Telkom and MTN
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Telkom and MTN tie up network agreement
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