Telkom said on Wednesday that it expects to report an improvement of about 200% in full-year normalised headline earnings per share (Heps). The share price leapt higher on the disclosure.

The results, for the 12 months to March 2024, will be published next Tuesday.

Telkom said it will report improved financial results despite what it described as “challenging economic and trading environments”.

“Stronger operational performance was driven by continued demand for our next-generation technologies, along with cost-optimisation initiatives,” it said. This, coupled with non-recurring once-offs in the previous comparable reporting period, contributed to a sharp improvement in earnings.”

Next-generation revenues – which exclude legacy copper technologies like ADSL – grew by 7%, and now contribute almost 80% of group revenue.

Reported Ebitda – a measure of operating profit – grew by about 18%, or 5% when normalised, in line with guidance.

Growth in earnings was positively impacted by lower depreciation and write-offs in the 2024 financial year after asset impairments recognised in 2023. “This growth was partially offset by higher net finance charges and foreign exchange and fair value movements in FY2024,” Telkom said.

Investors react

The group also disclosed that it has been required to restate its 2023 Heps figure by a material amount.

“For FY2023, the group correctly calculated and accounted for tax in the group statement of profit or loss and other comprehensive income,” it said.

“However, it incorrectly adjusted for tax on the headline earnings, relating to the profit on disposal, impairment and write-offs of property, plant and equipment and intangible assets. This resulted in a R47-million overstatement of headline earnings, which led to a 9.7c overstatement of Heps in the prior year.”

Investors lapped up the news of the expected improvement in 2024 earnings, with the share price jumping more than 6% shortly after the market open in Johannesburg on Wednesday. — © 2024 NewsCentral Media