Telkom expects full year earnings to be hit hard after the company had to pay over R2 billion in staff cut packages over the last 12 months.
Headline earnings per share (HEPS) for the year ended 31 March are expected to decrease by 40% to 50% year-on-year. Similarly, basic earnings per share (BEPS) are expected to drop by between 20% and 30%.
The results will be impacted by the fact that approximately 4 200 employees accepted voluntary severance and voluntary early retirement packages during the financial year. This cost Telkom R2.2 billion, with a related tax impact of approximately R500 million.
On a normalised basis - excluding the impact of the voluntary packages and the related tax benefit - HEPS are expected to increase by 10% to 20% and BEPS by 30% to 40%. Telkom says the main difference between BEPS and HEPS is increased profit from the sale of property recorded during the 12 months.
The telco's interim results, released last November, were also hammered by a R1.5 billion severance package bill - with HEPS dropping 65%.
In July 2015, Telkom was forced to abandon a process of forced retrenchments for about 4 400 staff and instead opted to offer employees voluntary retrenchment packages.
At the time, group CEO Sipho Maseko said the company needed to trim staff numbers and up productivity to continue with its business transformation strategy to cut costs by at least R1 billion a year going forward.
Telkom's stock closed over 4% higher yesterday on the back of the trading statement update, at R56.40. The company's share price has, however, dropped almost 21% over the past year, and around 12% year-to-date.
The company's full year results are expected to be released on 6 June.
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