Telkom SA has issued a trading statement informing shareholders that earnings per share will be higher than last year.
On 18 March, the company issued a trading statement advising shareholders that results to be reported on for the year ended 31 March 2014 would be at least 20% higher than those of the prior corresponding period.
Basic earnings per share (BEPS) and headline earnings per share (HEPS) for the year ended 31 March 2013 were restated as a result of the adoption of IAS 19R (the International Accounting Standard on accounting for employee benefits), the amendment to IAS 16 (the International Accounting Standard on accounting for property, plant and equipment) and as a result of the reclassification of iWayAfrica as a discontinued operation following the disposal thereof.
BEPS from continuing operations for the 2013 financial year have been restated to indicate the loss of 2 282.6 cents per share and HEPS from continuing operations to a profit of 86.2 cents per share.
Basic earnings per share from continuing operations for the 2014 financial year are expected to be between 2,972 and 3,428 cents higher than the restated BEPS for the 2013 financial year. Headline earnings per share from continuing operations for the 2014 financial year are expected to be between 772 to 789 cents higher than the restated HEPS for the 2013 financial year.
The main drivers of the increase in earnings included in the 2014 financial year are: the net curtailment gain recognised on the post-retirement medical aid liability of R2 169-million and the associated tax benefit of R246-million; the net positive impact of the decrease in mobile termination rates; lower selling, general and administrative expenditure as a result of cost saving initiatives implemented; and lower depreciation as a result of the R12-billion impairment in the previous year.
Items included in the 2013 financial year also contributed to the increase are: the R 12-billion non-cash impairment of assets; the provision for the Competition Commission fines of R 592-million; and the R 434-million relating to the cost of voluntary severance and early retirement packages.
Telkom will release its results for the year ended 31 March 2014 on or about 13 June 2014.