Johannesburg – Telkom’s share price rose by more than 11% on the JSE yesterday afternoon after the telecommunications company released a strong trading update that expected a huge surge in earnings for the year to the end of March.
The company said it expected its headline earnings per share to increase by between 145 and 155 percent, to between 505.9 cents and 530.7 cents a share, up from 208.1 cents last year.
Its basic earnings per share were likely to rise by between 300 and 310 percent to between 484.4cents and 496.5 cents, up from 121.1 cents reported a year earlier.
The group attributed the expected increase in earnings mainly to the 20% increase in earnings before interest, tax, depreciation and amortisation (Ebitda) during the period compared to last year.
In last year’s full-year results, Telkom reported an 8.7% decline in Ebitda to R10.3 billion.
Telkom also benefitted from a lower tax rate of 30.5%, compared to a tax rate of 37.6% a year earlier.
“The strong performance includes the impact of voluntary severance packages, voluntary early retirement packages and section 189 retrenchment packages of R270 million and the related tax impact of R76m in the current year, while prior-year earnings include R1.19bn and the related tax impact of R332m relating to voluntary severance packages, voluntary early retirement packages and retrenchments,” said the group.