[business day] INVESTORS in Telkom have been warned about a catalogue of financial hits and poor performances that will whack up to 60% off its basic earnings per share for the current financial year.
The news temporarily wiped more than 4% off its share price, which is fluctuating at about R58 after the dramatic halving of its value naturally caused by stripping out its 50% stake in Vodacom on Monday.
Part of the further damage to be faced in Telkom's results for the year to March was created by Vodacom, in the form of R691m in charges relating to Vodacom's black empowerment deal.
Another bill of R177m was generated in fees relating to Vodacom's demerger, along with deferred tax credits of R421m from the disinvestment. Telkom said its operations in SA performed "satisfactorily" but its Nigerian activities were more gloomy.
Operations acquired in the previous financial year suffered losses due to competitive pricing pressures and inadequate distribution channels.
Foreign exchange losses and other costs relating to its acquisition of the Nigerian operator MultiLinks are estimated at R409m, plus goodwill impairments of R501m.
Telkom is also having to invest more money in Nigeria to build a better network for MultiLinks to serve its customers.
When Telkom includes discontinued operations in its figures, headline earnings per share will dip by 35% to 45%. Discontinued operations include Vodacom and the controversial Telkom Media, its abortive venture into television broadcasting.
Telkom should report its results on June 22.
Telkom Warns of Earnings Fall
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