Telkom says its interim results are likely to be hit by a bill of R1.5 billion paid towards voluntary severance and retirement packages for staff.
The telco issued a trading statement this morning warning shareholders that headline earnings per share (HEPS) are likely to be between 65%-85% lower than the year before.
This earnings drop was largely due to the cost of letting 3 108 employees go through voluntary severance and retirement packages. The staff decrease did, however, result in a related tax benefit of around R446 million, compared to just R91 million in the previous interim period.
In July, Telkom abandoned a process of forced retrenchments for over 4 000 staff and instead opted to offer employees voluntary packages.
Telkom says normalised basic earnings per share are expected to be 10%-30% higher because of "lower employee expenses due to lower headcount emanating from the voluntary severance and retirement packages in the prior financial year" as well as higher profit on sale of properties. These were partly offset by higher accelerated depreciation on the company's asset base.
Basic earnings per share will likely drop by between 45% and 65%, while normalised HEPS were expected to range from 5% lower to 15% higher.
Telkom is expected to release its results for the six months ended 30 September on 16 November.
The company's share price was down over 3% this morning following the warning.
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