Telkom rockets higher on earnings - TechCentral

Telkom rockets higher on earnings

Investors are cheering Telkom’s turnaround, led by CEO Sipho Maseko

Telkom’s share price on Friday was testing highs not seen in eight years after the telecommunications company released a positive earnings update that delighted investors.

The share on Friday morning touched R82, just shy of the multi-year closing high of R82,35 set on 24 April 2015.

If the share price closes above that level, it will end the session at its highest level since May 2009, when it divested of its 50% stake in Vodacom. (Update: The share price closed on Friday at R79,90, up 1,9% on the session.)

Telkom, which will report its results for the year ended 31 March 2017 on 5 June, said it expects headline earnings per share (Heps) to be between 0% and 20% higher than a year ago. This figure excludes the effect of voluntary retrenchments in the prior financial year. With those figures included, reported Heps will rise by between 110% and 130%.

“The prior year’s reported earnings were impacted by voluntary severance packages and voluntarily early retirement packages of R2,2bn, with a related tax benefit of R517m, while the current-year impact is significantly lower at R66m, with a related tax benefit of R13m,” Telkom explained in a statement to shareholders issued shortly before markets closed on Thursday.

Reported basic earnings per share are expected to increase by between 60% and 80%, the company said. Excluding the costs associated with the voluntary retrenchments and early retirement packages, the range will be between 10% lower and 10% higher, it said.

The earnings numbers include the performance of IT services firm BCX (formerly Business Connexion), which has been incorporated for 12 months compared to seven months in the prior year. Telkom bought BCX in 2015 for R2,7bn in cash.

Over the past year, Telkom has strongly outperformed its bigger listed rivals, Vodacom and MTN. In that period, Telkom’s share price has appreciated by 35,7% as investors cheered the turnaround, led by CEO Sipho Maseko. MTN’s share price has fallen by 5,7% over the past year, while Vodacom has declined by 8,8%.  — © 2017 NewsCentral Media

  • There’s something very wrong with South Africa’s market if a company with such bad customer service (a serious understatement) is doing very well. I can only guess that corruption at the core of our country is to blame.

  • Marcan X

    In many ways, basic telecoms infrastructure, fibre networks, Telkom is still a near monopoly, a company with a great market dominance.

  • Arthur

    So why has it not been reported to that most useless of organisations, the Competition Commission? Or is that a rhetorical question?

  • Magomarele Gomi Thobejane

    You think Telkom has bad service? Visit MTN you’ll know what is poor customer service. It’s like there are no employees or managers. No one respond to email complaints or social media posts. Forget about call centre. They just play dead.

  • sam singh

    Telkom is showing a profit because it has outsourced all its divisons from the Contact Centre, IT to it’s Technical divisons. Don’t be fooled there is no growth just a diverted savings on labour cost.

  • Disme

    Poor customer service is relative… while Telkom might not be anywhere near what is expected of them by international norms, their competition has in many cases nosedived their own customer service…which makes Telkom look relatively better than what they used to