TELKOM SA SOC LIMITED - Updated Trading Statement

Updated Trading Statement

Telkom SA SOC Limited
(Registration number 1991/005476/30)
JSE share code: TKG
ISIN: ZAE000044897
("Telkom" or the "Group")


Updated trading statement

Shareholders of Telkom are referred to the trading statement released on the Stock Exchange News
Service of the JSE Limited on 10 October 2014 whereby Shareholders were advised that the results
to be reported on for the six months ended 30 September 2014 would be at least 20% lower than
those of the prior corresponding period.

The results to be reported on include the following items that are not part of the results from normal
business operations:

-   Provision for retrenchment and voluntary severance and retirement packages of approximately
    R234 million after tax in the current period; and
-   The net curtailment gain recognised on the post retirement medical aid liability of R2 173 million in
    the prior period.

Reported and normalised earnings for the six months ended 30 September 2014 are expected to
differ from the prior corresponding period as indicated below:


                                 30 September 2013                   30 September 2014
                                      Reported                           Expectation
Basic earnings per share
  Reported                              566.2            55%-65% lower         311cps - 368cps lower
  Normalised                            140.6            80%-90% higher        112cps - 127cps higher

Headline earnings per share
  Reported                              649.8            60%-70% lower         390cps - 455cps lower
  Normalised                            224.2            10%-20% higher         22cps - 45cps higher

The increase in normalised basic earnings for the six months ended 30 September 2014 are mainly
as a result of:

    -   Lower payments to mobile operators resulting from the reduction in termination rates;
    -   lower asset impairments and write offs; and
    -   a decrease in expenses relating to the post-retirement medical aid liability due to the
        curtailment and settlement of part of the liability in the prior period.

This was partially offset by:

    -   lower foreign exchange gains as a result of the implementation of hedge accounting from 1
        October 2013, which results in certain foreign exchange gains and losses not being
        recognised in earnings in the current period.; and
    -   higher taxation.

The main reason for the higher increase in normalised basic earnings per share (80% - 90% higher)
when compared to the increase in normalised headline earnings per share (10% - 20% higher) is the
asset impairments and write offs in the prior period which are excluded from the calculation of
headline earnings per share.


Telkom will release its results for the six months ended 30 September 2014 on 17 November 2014.

This updated trading statement has neither been reviewed nor reported on by the Group's external
auditors.

Pretoria
3 November 2014

Sponsor
The Standard Bank of South Africa Limited

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