Telecommunications

Telkom expects massive profit boost

Telkom

Telkom informed shareholders this morning that it expects a significant boost in profit for its 2024 financial year.

The telecoms giant said in a SENS announcement this morning that its basic earnings per share (BEPS) and headline earnings per share (HEPS) are expected to rise by over 100%.

The anticipated changes in BEPS and HEPS for the year are as follows –

Telkom explained that the difference between BEPS and HEPS is largely due to the net impact of write-offs of assets as well as the profit or loss it made on the sale of its assets in its 2024 financial year. 

In the 2023 financial year, the difference between BEPS and HEPS was largely due to the net impact of the impairment of assets as well as the profit or loss it made on the sale of its assets.

The table above includes normalised BEPS, which, in the prior year, excluded the once-off restructuring costs of R1.07 billion and the related tax impact of R288 million, together with the once-off impairment charge of R13.02 billion and the related tax impact of R3.48 billion. 

Normalised HEPS for the prior year exclude the once-off restructuring costs of R1.07 billion and the related tax impact of R288 million.

Telkom also informed shareholders that its next-generation revenues grew by approximately 7% and now comprise almost 80% of total revenue. 

Reported EBITDA grew by approximately 18%, while normalised EBITDA grew at approximately 5%.

The company said earnings growth has also been positively impacted by lower depreciation and write-offs in the 2024 financial year after asset impairments recognised in 2023. 

However, this growth was partially offset by higher net finance charges and foreign exchange and fair value movements in 2024.

  • Telkom’s depreciation and amortisation for property, plant and equipment and intangible assets decreased by approximately 23% from R7.15 billion in the prior year.
  • Write-offs of property, plant and equipment and intangible assets reduced to approximately R80 million from R13.51 billion write-offs and impairments of property, plant and equipment and intangible assets in the prior year.
  • Net finance charges and fair value movements increased by approximately 47% from R1 485 million in the prior year, largely due to higher lending rates during the year.

Telkom is set to release its full-year results on 18 June 2024.

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