Telkom has warned shareholders to expect a big drop in basic earnings per share and headline earnings in its interim financial results for the six-month period ended 30 September.
This morning, the fixed-line operator issued a trading statement, saying it was finalising its reviewed interim financial results, which will be released on Monday, 19 November.
"Further to previous cautions regarding our financial performance, shareholders are advised that the basic earnings per share and headline earnings per share are expected to be between 14% and 20% lower than the reviewed interim financial results reported for the comparable prior period," Telkom says in a trading statement.
Last year, Telkom`s headline eranings increased by 10.6%, to 874.7c per share, in the comparable period last year, while basic earnings increased 7.55%, to 868.1c per share.
Telkom says the drop in earnings was caused by its aggressive marketing initiative, which offers the bundling of services at discounted rates, as well as increased investment in materials and maintenance to improve the reliability of its network and customer services.
Higher depreciation, resulting from increased capital expenditure to enhance network capacity, and changes in the fair value of financial instruments from a stronger rand, also contributed to the earnings drop, says Telkom.
The company also cautions that the financial information on which today`s trading statement is based has not been reviewed and reported on by its auditors.
Telkom`s share price had dropped 2.23%, from a closing price of R179.51 on Friday, to R175.50 by 1:28pm today, shedding R4.01.
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