Telkom outlines expected earnings

·11 Nov 2013

Telkom says it expects headline earnings per share (HEPS) for the six months ended September 2013 to be 622 to 628 cents per share higher than the stated figure for the prior corresponding period.

Basic earnings per share (BEPS) is expected to be 546 to 550 cents per share higher than the restated BEPS for the prior corresponding period.

Telkom noted that BEPS was restated to 17.8 cents per share from 30.2 cents per share and HEPS to 24.9 cents per from 37.2 cents per share.

The increase in BEPS and HEPS is mainly as a result of a net non-cash curtailment and settlement gain of approximately R2.2 billion on the group’s Post-Retirement Medical Aid liability.

Additional impacts included:

Lower payments to mobile operators of approximately R380 million;
Increase in foreign exchange and fair value gains of approximately R219 million; and
The results for the six months ended 30 September 2012 were adversely affected by the
provision for the Competition Commission fine of R 389 million.

Excluding the above impacts, Telkom said it expects BEPS to be 37 to 56 cents per share higher than the restated BEPS for the prior period, while HEPS is expected to be 113 to 133 cents per share higher than in 2012.

Telkom said that depreciation, amortisation, impairments and write offs reflected a year on year increase of approximately R125 million, despite a depreciation saving relating to the R12 billion impairment to the asset base in March 2013.

“The saving in depreciation has been offset by accelerated depreciation emanating from the review of the useful lives of drop wires installed at customer premises and the impairment of spare parts and service equipment reclassified from inventory to property plant and equipment,” the group said.

In the interim period in 2012, Telkom announced basic earnings per share of 85.2 cents, while headline earnings per share from continuing operations decreased by 35.5% to 191.7 cents.

Telkom is expected to publish its results for the six months ended September, next week (18 November 2013).