The Department of Communications benefited to the tune of R3.9 billion from Telkom's sale of its Vodacom stake.
Telkom, SA's fixed-line operator, paid the department “extraordinary” dividends after it sold off its 15% stake in Vodacom last year. Telkom's 15% stake earned it R22.5 billion, of which the bulk was paid out to its majority shareholder, government, which has a 39.8% stake.
In the company's annual report for the year to March 2009, Telkom says it unbundled its stake in Vodacom on 20 April, and distributed half of the after-tax profits of the R22.5 billion, which was R19 a share.
At the time, the company had 500.7 million shares in issue, making its payout worth R9.5 billion. Telkom distributed its remaining 35% stake in Vodacom to Telkom shareholders based on their shares in Telkom.
Earnings slow
The Department of Communications made a total of R5.4 billion in the current financial year, which is drawing to a close. This was an improvement from the R3.4 billion it earned in the 2006/7 financial year, according to the Estimates of National Expenditure.
However, despite the receipt of R3.9 billion in a special dividend following the unbundling of Vodacom, the department's budget has been trimmed. It will have R150 million less to spend in the new financial year, as once-off key infrastructure spending comes to an end.
Last year, the expenditure estimates showed the department would have R2.26 billion to spend in the 2010/11 year, an amount that has been trimmed in this year's estimates to R2.114 billion.
The department's spending will slow as the 2010 Fifa World Cup and other related infrastructure has been implemented. It also expects to save R949 million over the next three years.
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