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Trading statement
Telkom SA SOC Limited
Registration number 1991/005476/30)
JSE Share Code: TKG
JSE Bond Code: BITEL
ISIN: ZAE000044897
("Telkom" or “the company”)
Trading Statement
Shareholders are advised that Telkom is currently finalising its interim results for the six months ended 30
September 2019.
In accordance with paragraph 3.4(b) of the Listings Requirements of the JSE, shareholders are advised that
reported headline earnings per share (HEPS) and the reported basic earnings per share (BEPS) are expected to
decrease by 30% to 40% compared to the corresponding period in the prior year.
This is due to a significant increase in net finance charges and fair value movement of between 120% to 130%
from R443 million reported in the prior year impacted by the International Financial Reporting Standards (IFRS16)
on finance charges. Excluding the impact of IFRS16, net finance charges and fair value movement increased
between 80% to 90% from R443 million reported in the prior year attributable to;
• the increase in the finance charges largely relates to increased borrowing in support of the investment in our
mobile business;
• cost of hedging increase as a result of the increase in the Forward Exchange Contracts (FEC) order book;
and
• exchange and fair value movements as a result of foreign exchange adjustments due to market conditions
and the conversion of floating rate debt to fixed rate debt using interest rate swaps in line with our guideline.
Overall in the period under review, this net movement represents a loss versus a reported gain in the
corresponding period of the prior year.
The impact of IFRS16 on profit after tax was immaterial between R50 million to R60 million.
The following table includes normalised earnings which exclude the voluntary severance packages and voluntary
early retirement packages (VSP/VERP) incurred in the prior period of R282 million and the related tax impact of
R80 million and are on a pro-forma basis. The normalised earnings are the responsibility of the directors and have
been presented for illustrative purposes only. Because of their nature, normalised earnings may not fairly present
Telkom’s earnings.
30 September 2018 Expected range 30 September 2019
As previously of decrease Expected results
reported (cents)
(cents)
Basic earnings per share
Reported 276.0 30%-40% or 193.2 to 165.6 cps
82.8 to 110.4 cps
Normalised 316.6 40%-50% or 190 to 158.3 cps
126.6 to 158.3 cps
Headline earnings per share
Reported 288.0 30%-40% or 201.6 to 172.8 cps
86.4 to 115.2 cps
Normalised 328.6 40%-50% or 197.2 to 164.3 cps
131.4 to 164.3 cps
The above information has not been reviewed nor reported on by Telkom’s independent external auditors. The
Group's results for the six months ended 30 September 2019 will be released on SENS on 12 November 2019
with a presentation in Johannesburg on the same day.
The presentation will be available for all stakeholders on the Group's website, www.telkom.co.za/ir.
Centurion
5 November 2019
Sponsor
Nedbank Corporate and Investment Banking
Date: 05/11/2019 02:03:00
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