Telecommunications company Telkom is set to conclude cash-out payments for its restructuring process next year.
This emerged today, when the JSE-listed organisation issued a trading update to its shareholders.
In February, Telkom announced it was looking to retrench 15% of its workforce − about 1 600 employees.
Said the company at the time: “As the group manages the delicate migration of revenue between old to new technologies, it is challenged with managing the costs associated with the different technologies, the competitiveness and sustainability of the group.
“Management has, therefore, embarked on a restructuring programme, which includes the S189A [Section 189 of the Labour Relations Act] process, to optimise group costs in line with evolving technology capabilities and demands.”
In its trading update, it says in line with the consultation process with unions, Telkom extended voluntary severance packages and voluntary early retirement packages to all employees in the group.
“The group is currently engaging its social partners, including concluding organisational manning, and is on track to achieve the initial commitment. The cash-out payment relating to the restructuring will occur in the 2024 financial year.
A further update will be provided with the release of the annual results for the current period, it says.
Telkom’s results for the year ended 31 March are expected to be released on SENS on or about 13 June.
Meanwhile, Telkom expects a decline in basic earnings per share (excluding the restructuring costs and impairment of assets charge) and headline earnings per share in the current period, driven by marginal revenue growth emanating from migrating legacy to new generation technologies; the deliberate upfront investment in working capital for handsets and equipment; costs associated with the impact of accelerated load-shedding caused by an unreliable power supply; and inflationary cost pressures.
In addition, it says a provision for the restructuring process further impacted basic earnings and headline earnings in the current period.
The expected impairment charge, estimated at R13 billion, impacts basic earnings in the current period.
“Shareholders are advised that the board is currently considering an impairment of assets charge in respect of the group’s cash generating units, namely Openserve, Telkom Consumer, Gyro and BCX, in the amount of approximately R13 billion (excluding tax effects). This follows Telkom’s strategy to accelerate its migration to newer technologies,” says the firm.
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