Telkom expects massive jump in profits

 ·12 Jun 2024

Telkom expects a massive jump in profits when it publishes its financial results on 18 June 2024.

In a trading statement for the year ended 31 March 2024 (FY2024), the group said that it anticipates reporting improved financial results for FY2024 despite challenging economic and trading environments.

The stronger operational performance was driven by continued demand for next-generation technologies, along with cost-optimisation initiatives, which improved earnings.

Thus, the group expects normalised basic earnings per share (BEPS) to increase by 440-450% and normalised headline earnings per share to increase by 195-205%.

However, when earnings are restated following a R47 million overstatement for headline earnings in FY2023, BEPS and HEPs increase by 114-124% and 1,155-1,165%, respectively.

“The difference between BEPS and HEPS is largely due to the net impact of write-offs of assets as well as profit/loss on sale of assets for FY2024,” said the group.

“For FY2023, the difference between BEPS and HEPS was largely due to the net impact of impairment of assets as well as profit/loss on sale of assets.”

“The table above includes normalised BEPS, which, in the prior year, excluded the once-off restructuring costs of R1,065 million and the related tax impact of R288 million, together with the once-off impairment charge of R13,017 million and the related tax impact of R3,477 million.”

“Normalised HEPS for the prior year exclude the once-off restructuring costs of R1,065 million and the related tax impact of R288 million.”

Next-generation revenue grew y roughly 7% and now comprises close to 80% of the total group revenue.

Reported EBITDA grew by around 18%, while normalised EBITDA grew at approximately 5% as expected.

The group said that the growth in earnings has been positively impacted by lower depreciation and write offs in FY2024 after asset impairments in FY2023.

However, this growth was partially offset by higher net finance charges and foreign exchange and fair value movements in FY2024:

  • Total depreciation and amortisation for property, plant and equipment and intangible assets
    decreased by approximately 23% from R7,145 million in the prior year;

  • Write-offs of property, plant and equipment and intangible assets reduced to approximately R80
    million from R13,508 million write-offs and impairments of property, plant and equipment, and
    intangible assets in the prior year; and

  • Net finance charges and fair value movements increased by approximately 47% from R1,485
    million in the prior year, largely due to higher lending rates during the year

Read: The big moneymaker in South Africa – with Capitec joining the trend

Show comments
Subscribe to our daily newsletter