TKG - Telkom SA Limited - Trading statement

TKG - Telkom SA Limited - 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 JSE Listings Requirements, 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 2011,    
which are expected to be released on or about Monday, 13 June 2011.             
Shareholders are reminded that the results for the year ended 31 March 2010     
have been restated to reflect the Multi-Links CDMA business as a disposal       
group held for sale, following the decision to exit this business.              
Profit from continuing operations have been normalised to exclude the effect    
of the sale of Vodacom and Telkom Media in the prior year and impairments.      
Normalised profit from continuing operations for the year ended 31 March 2011   
is expected to be lower than the prior period primarily due to:                 
'  the inclusion of approximately R1.1 billion operating loss relating to the   
start-up of the mobile business;                                                
'  voluntary employee severance package expenditure incurred of approximately   
R739 million; partially offset by                                               
'  lower taxation mainly as a result of lower profit levels and tax             
concessions.                                                                    
Normalised and reported headline earnings per share (`HEPS`) and Basic          
earnings per share (`BEPS`) from continuing operations for the year ended 31    
March 2011 are expected to differ from the prior year as indicated below.       
                         March 2010       March 2011                            
                        Restated         Expectation                            
Basic earnings per share                                                        
    Reported             7,994.4          85% to 105% lower                     
    Normalised           639.5            20% to 40% lower                      
Headline earnings per                                                           
share                     260.5            55% to 75% higher                    
   Reported              686.7            25% to 45% lower                      
   Normalised                                                                   
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 in the    
prior period and the related capital gains tax and impairments and write-offs   
relating to property, plant and equipment and intangible assets as well as      
profit on disposal of property, plant, equipment and intangible assets.         
This trading statement has neither been reviewed nor reported on by the         
company`s external auditors.                                                    
Update on Multi-Links                                                           
Multi-Links has on 20 December 2010, initiated a civil action against Helios    
regarding the validity of the Master Lease Agreement. The matter has been       
heard and judgement is expected on 7 June 2011 or soon thereafter. Helios       
brought a counter application against Multi-Links on 23 December 2010 in which  
they, amongst other things, requested an interim status quo order (to keep the  
status of the parties` positions in terms of the contract intact for an         
interim period); an interdict against the sale of Multi-Links` assets and a     
claim for damages in the amount of USD252 million relating to so called         
"anticipatory breach of contract". The interim status quo order was granted to  
Helios in December 2010 but, in terms of Nigerian Court rules, expired seven    
days after it was granted. The Court refused the interdict preventing the       
sale. The damages claim of Helios has not yet been heard. Certain cost orders   
have been awarded against Helios. The parties are still continuing to perform   
in terms of the Master Lease agreement and the contract has not been breached   
by Multi-Links.                                                                 
Telkom remains committed to exiting Multi-Links` CDMA business.                 
Johannesburg                                                                    
31 May 2011                                                                     
Sponsor: UBS                                                                    
Date: 31/05/2011 13:25:00 Supplied by www.sharenet.co.za                     
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