Telkom’s share price leapt higher by nearly 4% on Tuesday after a positive trading update fired up investors’ appetite for the stock.
At the close on Tuesday, the share was up by 3,9% at R32 after at one stage trading as high as R32,60.
Telkom told shareholders that it expects its headline earnings per share and basic earnings per share for the year ended 31 March 2014 to be at least 20% higher than in the same period a year ago. However, a number of impairments and provisions in the 2013 financial year have helped push up Telkom’s numbers in the latest reporting period.
The results for the 2014 financial year will be positively affected by a “net curtailment gain” of about R2bn recognised on the company’s post-retirement medical aid liability and a related tax benefit of R246m.
The results for the prior comparable period were negatively affected by a R12bn non-cash impairment of assets, the provision for Competition Commission fines of R592m and R434m relating to the cost of voluntary severance and early retirement packages.
Telkom expects to publish its annual results on 13 June. — (c) 2014 NewsCentral Media