Telkom delivers earnings warning

Telkom has advised that its headline earnings per share from continuing operations for the six months ending September 2012 are expected to be at least 65% lower than the prior comparative period.

HEPS from continuing operations for the six months ended September 2011 stood at 191.7 cents, 35.5% lower than in 2010.

Telkom advised shareholders that basic earnings per share from continuing operations for the six months ending 30 September 2012 is expected to be at least 45% lower than in 2011.

“The lower earnings are mainly attributable to an increase in the provision for Competition Commission fines relating to transgressions of the company dating back approximately 10 years.”

“The operational performance for the period up to 31 August 2012 has been further characterised by flat revenue and operating cost that escalated just below inflation,” it said in a statement.

For the six months ending 30 September 2011, Telkom reported operating revenue down 3.2% to R16.4 billion, while basic earnings per share decreased 70.8% to 85.2 cents per share.

In August, the Competition Tribunal imposed penalty of R449 million on Telkom in its case against the South African Value added Networks Services (SAVA).

Telkom, however, said it would appeal the fine imposed for abusing its dominance in the telecommunications market between 1999 and 2004.

On Wednesday (19 September), the Department of Communications (DoC) presented a list of three strategic options for Telkom to cabinet, having blocked a deal between the incumbent telecoms provider and Korea based KT Corp in June.

Telkom is expected to announce its results on November 19, 2012.

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Telkom delivers earnings warning