Telkom’s share price reacted positively on Friday after the telecommunications operator told shareholders that it expects both its basic and headline earnings per share for the six months ended 30 September 2014 to be at least 20% lower than a year ago.
“The expected decrease in the results for the 2015 interim reporting period is due to the net curtailment gain of R2,2bn recognised on the post-retirement medical aid liability in the prior corresponding period,” Telkom said in a statement issued via the JSE’s Sens service.
Excluding the R2,2bn gain, basic earnings per share would have been at least 20% higher than the prior corresponding period, it said. “The increase is mainly attributable to lower payments to other operators resulting from the decrease in mobile termination rates and lower asset write-offs.”
Telkom’s share price recovered some ground after the statement was issued after earlier trading as low as R58,27/share. Shortly after 2pm on Friday, it was quoted at R60,48/share, down by 0,9% on the session, and not far off its 12-month high of R62,15 set on 3 September.
In terms of JSE listing requirements, companies are required to publish a trading statement as soon as they become reasonably certain that the financial results for the period to be reported on next will differ by at least 20% from the prior corresponding period.
Telkom said it will provide an updated trading statement confirming a more specific range for both basic and headline earnings per share once it has “reasonable certainty on the result to be report on”. It expects to publish its interim results on 17 November.
Meanwhile, it said it is continuing its talks with rival MTN in terms of which the companies intend expanding their existing roaming agreement to include bilateral roaming and outsourcing of the operation of Telkom’s mobile access network. Those discussions have been going on for most of 2014. — © 2014 NewsCentral Media