Telkom has warned shareholders that it expects its headline earnings per share for the six months ended 30 September 2015 to be as much as 85% lower than the same period a year ago, though when normalised, the figure could be as much as 15% higher.

The discrepancy is because of the cost of voluntary severance and retirement packages, which amounted to R1,5bn (R325m a year ago) to let go of 3 108 employees. There was, however, a related tax benefit of R446m (R91m a year ago).

Basic earnings per share are expected to be between 45% and 65% lower, though the normalised number is likely to be between 10% and 30% higher, Telkom said.

The improvement in the normalised earnings figures is the result of lower employee expenses flowing from the reduction in the number of staff in the prior year as well as higher profit on the sale of properties.

However, these benefits were partly offset by the higher accelerated depreciation of assets.

“The primary reason for the higher increase in normalised basic earnings per share (10% to 30% higher) when compared to normalised headline earnings per share (5% lower to 15% higher) is the higher gain on sale of assets in the current period, which are excluded from the calculation of headline earnings per share,” Telkom explained.