Telkom flags a more than 50% fall in half-year earnings
Telecommunications giant Telkom expects its earnings to fall by over half for the first half of its 2023 financial year, on the back of changes between its mobile postpaid and prepaid mix and an increasing cost base.
The big six network operator said on Monday that it will report a decrease of between 45% and 55% in headline earnings per share (Heps) and reported basic earnings per share when it delivers its six months financial results for the period ended 30 September 2021.
Telkom expects headline earnings of 128.5 to 157.00 cents per share and basic earnings of 124.6 to 152.2 cents per share.
A shift in mobile product mix coupled with the upfront spend on handsets recorded immediately increased the cost of handsets, equipment, software and directories by more than 30% from R2.4 billion in the prior period,” Telkom noted in a trading update to investors on Monday.
The trading update saw the group’s shares fall around 6% in morning trade.
Meanwhile, Telkom also reported a rise in maintenance and service costs, which climbed 10% from a previous R1.9 billion, and 20% from R1.6 billion, respectively.
These costs were also driven by higher back up energy costs against the backdrop of increased load shedding.
Notwithstanding the weaker performance in earnings and the challenging trading environment, Telkom expects to sustain its topline revenue compared to the prior period,” the company said.