Telkom share price tanks after lower profit forecast

Telkom’s share price plummeted today (Friday 30 March 2012) after the company announced that it expects its headline earnings per share (HEPS) to fall by at least 25% for the year ending 31 March 2012.

Basic earnings per share from continuing operations for the year ending 31 March 2012 are expected to be at least 90% lower than the prior year.

Telkom said in a SENS statement that basic earnings per share from continuing operations are expected to be at least 90% lower than the prior year.

Telkom further announced that headline earnings per share are expected to be at least 25% lower than the prior year.

Telkom said that the decrease is mainly attributable to the recognition of a net loss of R950 million on the disposal of the Multi-Links foreign operation, and the impairment of iWayAfrica of approximately R550 million.

8ta is also costing Telkom shareholders a lot of money. Telkom said that the EBITDA loss incurred by the mobile business (8ta) is approximately R2.2 billion.

Telkom explained that these items will be partially offset by lower employee expenditure, as R739 million was spent on voluntary employee severance packages in the prior year.

Telkom shares lost around 7% in early trade, but recovered some losses in the late afternoon and were trading at R23.80 (2.22% down) by 16:00.

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Telkom share price tanks after lower profit forecast