| Fri 14 May 2010, 12:56 | | TKG - Telkom SA Limited - Telkom Trading Statement |
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TKG
TKG
TKG - Telkom SA Limited - Telkom 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 Listings Requirements of the JSE Limited,
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 2010,
which are expected to be released on or about Monday, 21 June 2010.
In South Africa, EBITDA continues to be impacted by increases in operating costs
which outstrip revenue growth.
In Nigeria, economic and competitive conditions were tough. In addition,
inventory write downs and subsidies were higher and accordingly, Multi-Links
Nigeria will report EBITDA losses higher than that of the previous year. The
level of inventories and inventory commitments were abnormally high given the
market circumstances of Nigeria and have been normalised.
As previously reported we successfully concluded the sale and unbundling of our
50% stake in Vodacom during the year which resulted in the following unusual
items impacting earnings for the year:
profit on the sale of our 15% share in Vodacom of R18,535 million;
gain on the unbundling of our 35% share in Vodacom of R25, 688 million;
capital gains tax on the sale and unbundling of our Vodacom shares of R1,353
million;
secondary taxation on companies (`STC`) on the special dividend relating to the
sale of Vodacom of R977 million;
reversal of the deferred tax asset relating to capital gains tax on the Vodacom
sale of R421 million;
compensation expense recognised in terms of IFRS2 relating to the amendment of
the Telkom Conditional Share Plan of R946 million;
fair value loss on the mark to market valuation of Vodacom shares held at 31
March 2010, of approximately R15 million;
Other once off items impacting the results include:
impairment of goodwill in Multi-Links Nigeria of R2.1 billion and impairment of
Multi-Links assets of approximately R3.2 billion as a result of the continuing
poor performance of Multi-links attributable to the local and global economic
factors, intensely competitive mobile market, and the relative disadvantaged
scale of these operations, has necessitated the full impairment of the Multi-
Links net asset value;
STC on the special dividend declared of R135 million; and
profit on disposal of Telkom Media of R68 million.
Normalised headline earnings per share (`HEPS`) from continuing operations for
the period, which excludes all the unusual items listed above, are expected to
be between 5% higher and 15% lower than the normalised HEPS of 506.1 cents for
the year ended 31 March 2009. Headline earnings per share, which includes the
STC on the special dividend, the compensation expense and the fair value loss on
Vodacom shares, are expected to be between 80% and 100% lower than the reported
HEPS of 606.7 cents for the year ended 31 March 2009.
Basic earnings per share (`BEPS`) including the profit on sale and gain on
unbundling of Vodacom and all expenses related to the transaction are expected
to be 1,505% to 1,525% higher than the BEPS of 457.4 cents reported for the year
ended 31 March 2009. BEPS from continuing operations for the year are distorted
by the accounting for the sale and unbundling of our 50% stake in Vodacom.
Normalised BEPS from continuing operations, which excludes the profit on sale
and gain on unbundling of Vodacom and all expenses related to the transaction,
are expected to be between 5% higher and 15% lower than the normalised BEPS of
456.6 cents per share for the year ended 31 March 2009.
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 and the related
capital gains tax and impairments and write-offs relating to property, plant and
equipment and intangible assets.
This trading statement has neither been reviewed nor reported on by the
Company`s external auditors.
Johannesburg
14 May 2010
Sponsor: UBS
Special note regarding forward-looking statements
Many of the statements included in this announcement, as well as oral statements
that may be made by Telkom or by officers, directors or employees acting on
their behalf related to the subject matter hereof, constitute or are based on
forward-looking statements. All statements, other than statements of historical
facts, including, among others, Telkom`s ability to implement its mobile
strategy and any changes thereto, Telkom`s future financial position and plans,
strategies, objectives, capital expenditures, projected costs and anticipated
cost savings and financing plans, as well as projected levels of growth in the
communications market, are forward-looking statements. Forward-looking
statements can generally be identified by the use of terminology such as "may",
"will", "should", "expect", "envisage", "intend", "plan", "project", "estimate",
"anticipate", "believe", "hope", "can", "is designed to" or similar phrases,
although the absence of such words does not necessarily mean that a statement is
not forward-looking. These forward-looking statements involve a number of known
and unknown risks, uncertainties and other factors that could cause Telkom`s
actual results and outcomes to be materially different from historical results
or from any future results expressed or implied by such forward-looking
statements. Among the factors that could cause Telkom`s actual results or
outcomes to differ materially from its expectations are those risks identified
in Telkom`s most recent annual report, which are available on Telkom`s website
at www.Telkom.co.za/ir and, other matters not yet known to Telkom or not
currently considered material by Telkom. Telkom caution you not to place undue
reliance on these forward-looking statements. All written and oral forward-
looking statements attributable to Telkom, or persons acting on their behalf,
are qualified in their entirety by these cautionary statements. Moreover, unless
Telkom is required by law to update these statements, Telkom will not
necessarily update any of these statements either to conform them to actual
results or to changes in Telkom`s expectations.
Date: 14/05/2010 12:56:21 Produced by the JSE SENS Department.
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