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TKG - Telkom SA Limited - Telkom Trading Statement

Release Date: 14/05/2010 12:56
Code(s): TKG
Wrap Text

TKG - Telkom SA Limited - Telkom Trading Statement Telkom SA Limited Registration Number 1991/005476/06) ISIN ZAE000044897 JSE Share Code TKG ("Telkom") TELKOM TRADING STATEMENT In terms of paragraph 3.4(b) of the Listings Requirements of the JSE Limited, companies are required to publish a trading statement as soon as they become reasonably certain that the financial results for the period to be reported on next will differ by at least 20% from those of the previous corresponding period. Telkom is currently finalising its results for the year ended 31 March 2010, which are expected to be released on or about Monday, 21 June 2010. In South Africa, EBITDA continues to be impacted by increases in operating costs which outstrip revenue growth. In Nigeria, economic and competitive conditions were tough. In addition, inventory write downs and subsidies were higher and accordingly, Multi-Links Nigeria will report EBITDA losses higher than that of the previous year. The level of inventories and inventory commitments were abnormally high given the market circumstances of Nigeria and have been normalised. As previously reported we successfully concluded the sale and unbundling of our 50% stake in Vodacom during the year which resulted in the following unusual items impacting earnings for the year: profit on the sale of our 15% share in Vodacom of R18,535 million; gain on the unbundling of our 35% share in Vodacom of R25, 688 million; capital gains tax on the sale and unbundling of our Vodacom shares of R1,353 million; secondary taxation on companies (`STC`) on the special dividend relating to the sale of Vodacom of R977 million; reversal of the deferred tax asset relating to capital gains tax on the Vodacom sale of R421 million; compensation expense recognised in terms of IFRS2 relating to the amendment of the Telkom Conditional Share Plan of R946 million; fair value loss on the mark to market valuation of Vodacom shares held at 31 March 2010, of approximately R15 million; Other once off items impacting the results include: impairment of goodwill in Multi-Links Nigeria of R2.1 billion and impairment of Multi-Links assets of approximately R3.2 billion as a result of the continuing poor performance of Multi-links attributable to the local and global economic factors, intensely competitive mobile market, and the relative disadvantaged scale of these operations, has necessitated the full impairment of the Multi- Links net asset value; STC on the special dividend declared of R135 million; and profit on disposal of Telkom Media of R68 million. Normalised headline earnings per share (`HEPS`) from continuing operations for the period, which excludes all the unusual items listed above, are expected to be between 5% higher and 15% lower than the normalised HEPS of 506.1 cents for the year ended 31 March 2009. Headline earnings per share, which includes the STC on the special dividend, the compensation expense and the fair value loss on Vodacom shares, are expected to be between 80% and 100% lower than the reported HEPS of 606.7 cents for the year ended 31 March 2009. Basic earnings per share (`BEPS`) including the profit on sale and gain on unbundling of Vodacom and all expenses related to the transaction are expected to be 1,505% to 1,525% higher than the BEPS of 457.4 cents reported for the year ended 31 March 2009. BEPS from continuing operations for the year are distorted by the accounting for the sale and unbundling of our 50% stake in Vodacom. Normalised BEPS from continuing operations, which excludes the profit on sale and gain on unbundling of Vodacom and all expenses related to the transaction, are expected to be between 5% higher and 15% lower than the normalised BEPS of 456.6 cents per share for the year ended 31 March 2009. The main differences between basic earnings and headline earnings are the profit on the sale and gain on unbundling of our 50% share in Vodacom and the related capital gains tax and impairments and write-offs relating to property, plant and equipment and intangible assets. This trading statement has neither been reviewed nor reported on by the Company`s external auditors. Johannesburg 14 May 2010 Sponsor: UBS Special note regarding forward-looking statements Many of the statements included in this announcement, as well as oral statements that may be made by Telkom or by officers, directors or employees acting on their behalf related to the subject matter hereof, constitute or are based on forward-looking statements. All statements, other than statements of historical facts, including, among others, Telkom`s ability to implement its mobile strategy and any changes thereto, Telkom`s future financial position and plans, strategies, objectives, capital expenditures, projected costs and anticipated cost savings and financing plans, as well as projected levels of growth in the communications market, are forward-looking statements. Forward-looking statements can generally be identified by the use of terminology such as "may", "will", "should", "expect", "envisage", "intend", "plan", "project", "estimate", "anticipate", "believe", "hope", "can", "is designed to" or similar phrases, although the absence of such words does not necessarily mean that a statement is not forward-looking. These forward-looking statements involve a number of known and unknown risks, uncertainties and other factors that could cause Telkom`s actual results and outcomes to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. Among the factors that could cause Telkom`s actual results or outcomes to differ materially from its expectations are those risks identified in Telkom`s most recent annual report, which are available on Telkom`s website at www.Telkom.co.za/ir and, other matters not yet known to Telkom or not currently considered material by Telkom. Telkom caution you not to place undue reliance on these forward-looking statements. All written and oral forward- looking statements attributable to Telkom, or persons acting on their behalf, are qualified in their entirety by these cautionary statements. Moreover, unless Telkom is required by law to update these statements, Telkom will not necessarily update any of these statements either to conform them to actual results or to changes in Telkom`s expectations. Date: 14/05/2010 12:56:21 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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