Telkom retrenchments cost R1.5 billion

Telkom has reported that its voluntary severance and retirement program has cost the company R1.52 billion, affecting 3,108 employees.

In a trading statement released on Tuesday (3 November) the group reported that its headline earnings would be between 65% and 85% lower for the six months ended September 2015.

This was largely due to the retrenchment process which was not part of normal business operations.

Normalised headline earnings, however, would be between 5% lower and 15% higher, as the resultant employee expenses would be lower due to a lower headcount emanating from retrenchments.

Telkom earnings 30 September 2014 Expected change 30 September 2015 expectation
Basic earnings per share 217.4 45%-65% lower 98cps – 141cps lower
Normalised 263.2 10%-30% higher 26cps – 79cps higher
Headline earnings per share 215.8 65%-85% lower 140cps – 183cps lower
Normalised 261.7 5% lower -15% higher 13cps lower – 39cps higher

The primary reason for the higher increase in normalised basic earnings per share (10% – 30% higher) when compared to normalised headline earnings per share (5% lower – 15% higher) is the higher gain on sale of assets in the current period, which are excluded from the calculation of headline earnings per share, Telkom said.

Telkom said it will release its results for the six months ended 30 September 2015 on or about Monday, 16 November 2015.

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Telkom retrenchments cost R1.5 billion