Telkom SA’s share price rang up 6.8% in value yesterday afternoon after it said adjusted headline earnings per share (HEPS) were expected to increase between 50% and 60% for the six months to September 30.
It said in a trading statement that adjusted HEPS was expected to be between 292.5 cents and 312 cents, up from 195 cents per share at the same time last year.
The share price was trading at R28.45 on the JSE yesterday at lunchtime, marginally higher than the R27.97 it was trading at a year ago.
This comes as Telkom improved its financial results in the past financial year on the back of its next-generation offerings and cost-optimisation efforts.
For the year ended 31 March 2024, Telkom’s total adjusted HEPS and adjusted basic earnings a share increased 201.3% and 442.8% to 376c and 385.5c, respectively.
Continuing strong demand for the group’s data proposition saw revenue growth from continuing operations rising within guidance. Mobile data and fibre-related data services also saw double-digit growth, offset by the ongoing fixed voice and legacy data erosion.
During the year, Telkom invested R6.1 billion to ensure network resilience, expand its mobile network, modernise its fixed network infrastructure and strengthen its skills and capabilities for information and communications technology- (ICT-) managed services.
This investment included spectrum, which Telkom has deployed to further improve offerings to retail, enterprise and wholesale customers.
Meanwhile, the group said improved financial results from operations were anticipated for the first half ending in September, before a R451 million after-tax charge relating to the termination of Telkom’s obligation of the defined benefit within the Telkom Retirement Fund (TRF), and the de-recognition of the corresponding funding plan asset.
This, along with restructuring costs, is reflected in the adjusted result.
Basic earnings a share of continuing and discontinued operations was expected to increase by between 5% and 15% to 230.2 cents a share.
The Telkom Retirement Fund is a hybrid fund established on July 1, 1995, as a defined contribution plan and a defined benefit plan for pensioners. The Financial Sector Conduct Authority approved a rule amendment for the conversion of the TRF from a defined benefit fund to a defined contribution fund during the past six months. This amendment removed the funding obligation risks towards the pensioners.
The interim results are expected to be released on Monday. Days ago, Telkom said it executed a court order for a “search and seizure” raid against a Johannesburg company and a franchise employee alleged to have fraudulently “poached” its customers.
Also, during the past six months, the group received approval from the Competition Tribunal for the R6.75 billion disposal to the infrastructure fund managed by a subsidiary of Actis, and an infrastructure vehicle owned by Royal Bafokeng Holdings, of Telkom’s masts and towers operations within Swiftnet.
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