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TELKOM SA SOC LIMITED - Trading Statement

Release Date: 29/10/2021 07:30
Code(s): TKG TL23 TL31 TL30 TL26 TL27 TL29 TL28 TL32 TL24 TL25     PDF:  
Wrap Text
Trading Statement

Telkom SA SOC Limited
Registration number 1991/005476/30
(Incorporated in the Republic of South Africa)
JSE share code: TKG
JSE bond code: BITEL
ISIN: ZAE000044897

("Telkom" or “the Group”)

Trading Statement

Shareholders are advised that Telkom is currently finalising its interim results for the six months ended 30
September 2021 (“H1 2022” or “the half year”), which will be released on the Stock Exchange News
Service (“SENS”) of the JSE Limited (“JSE”) on 09 November 2021.

In accordance with paragraph 3.4(b) of the Listings Requirements of the JSE, shareholders are advised
that reported headline earnings per share (HEPS) is expected to increase between 25% - 35% and basic
earnings per share (BEPS) is expected to increase between 20% and 30% compared to the prior interim
period ended 30 September 2020 (“the prior period”). This was mainly due to a significant decline in
finance charges, fair value movements and foreign exchange losses compared to the prior period.

Finance charges, fair value movements and foreign exchange losses declined by 35% from R1 012 million
reported in the prior year to R659 million attributable to:

    •   Our funding strategy and the ongoing settlement of maturing debt resulted in finance charges
        reducing by 25% from R723 million reported in the prior period to R541 million. Our conservative
        funding approach enabled us to strengthen our balance sheet by repaying maturing debt of
        approximately R1.1 billion in the prior financial year, with R900 million repaid in the first half of the
        prior financial year. In the first half of the current financial year, we settled a further R100 million
        maturing debt. Our funding strategy allowed us to balance our cost of debt ratio to 52:48 floating
        to fixed, this ensures that the risk to changes in interest rates remain balanced; and
    •   Fair value movements and foreign exchange losses reduced significantly by more than 90% from
        R209 million reported in the prior period to R17 million, due to currency volatility and favourable
        foreign exchange hedging position.

Notwithstanding the strong performance in earnings, the trading environment remains challenging. Telkom
expects to sustain its topline revenue compared to the prior year and grow its profitability slightly ahead of
                        30 September 2020                                 30 September 2021

                                 Reported       Expected ranges                     Movement                Expected
                         Earnings (cents)                                             (cents)               earnings
    Reported                        217.5        20%-30% higher       43.5 to 65.3 cps higher     261.0 to 282.8 cps
    Reported                        219.0        25%-35% higher       54.8 to 76.7 cps higher     273.8 to 295.7 cps

The difference between BEPS and HEPS recorded in H1 FY2022 is due to the impairment of assets and
profit or loss on sale of assets.

The above information has not been reviewed or reported on by Telkom’s independent external auditors.

The Group's interim results for the six months ended 30 September 2021 will be released on SENS on 09
November 2021 with a presentation in Centurion on the same day. The presentation will be available for
all stakeholders on the Group's website, A live presentation will be webcast (a link
will be available on Group’s website) and a live broadcast on BDTV (Channel 412 on DSTV) at 12 pm.

29 October 2021

Nedbank Corporate and Investment Banking, a division of Nedbank Limited

Date: 29-10-2021 07:30:00
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