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 dated on 8 October 2013 whereby they were advised that the results to be
reported on for the six months ended 30 September 2013 would be at least 20% higher than those of
the prior corresponding period.

Basic earnings per share (“BEPS”) and headline earnings per share (“HEPS”) for the six months ended 30
September 2012 were restated as a result of the adoption of IAS 19R (the International Accounting
Standard on accounting for employee benefits) and the amendment to IAS 16 (the International
Accounting Standard on accounting for property, plant and equipment). BEPS was restated to 17.8
cents per share from 30.2 cents per share and HEPS to 24.9 cents per from 37.2 cents per share.

   -   BEPS is expected to be 546 to 550 cents per share higher than the restated BEPS for the prior
       corresponding period and HEPS is expected to be 622 to 628 cents per share higher than the
       restated HEPS for the prior corresponding period. The increase in BEPS and HEPS is mainly as a
       result of the following:Net non-cash curtailment and settlement gain of approximately R 2.2
       billion on the Post-Retirement Medical Aid liability:
            o The reassessment of the underlying assumptions driving the movement in the post-
                retirement medical aid liability for a select number of qualifying employees has been
                completed. The growth assumption for the subsidisation amount at retirement has been
                capped at 0%. The qualifying employees were offered a settlement calculated at the
                economic value of their liability, with growth capped at 0%. This curtailment and
                subsequent settlement through a transfer of the liability to an insurer has resulted in a
                net non-cash gain of approximately R 2.2 billion as the liability relating to qualifying in
                service employees accepting the settlement offer is derecognised in terms of
                International Financial Reporting Standards.
   -   Lower payments to mobile operators of approximately R380 million;
   -   Increase in foreign exchange and fair value gains of approximately R 219 million; and
   -   The results for the six months ended 30 September 2012 were adversely affected by the
       provision for the Competition Commission fine of R 389 million.

Excluding the impact of the non-cash curtailment and settlement gain on the results for the six month
ended 30 September 2013 and the Competition Commission fine on the results for the six month ended
30 September 2012, BEPS is expected to be 37 to 56 cents per share higher than the restated BEPS for
the prior corresponding period and HEPS is expected to be 113 to 133 cents per share higher than the
restated HEPS for the prior corresponding period.
Depreciation, amortisation, impairments and write offs reflects a year on year increase of approximately
R125 million despite a depreciation saving relating to the R12 billion impairment to the asset base in
March 2013. The saving in depreciation has been offset by accelerated depreciation emanating from the
review of the useful lives of drop wires installed at customer premises and the impairment of spare
parts and service equipment reclassified from inventory to property plant and equipment in terms of an
amendment to IAS 16 of International Financial Reporting Standards.

Telkom will release its results for the six months ended 30 September 2013 on 18 November 2013. This
updated trading statement has neither been reviewed nor reported on by the Group's external auditors.



Pretoria

11 November 2013

Sponsor:

The Standard Bank of South Africa Limited

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