Telkom to report rise in half-year earnings
JSE-listed Telkom expects to post a double-digit increase in earnings when it publishes its financial results for the six months ended September 30, 2021, on November 9.
Telkom, which is currently finalising its interim results, anticipates reporting a 25% to 35% increase in reported headline earnings a share, from 219c in the comparative six months in 2020 to between 273.8c and 295.7c apiece in the first half of 2021.
Basic earnings a share are expected to increase by between 20% and 30% to between 261c and 282.8c in the six months under review from the 217.5c posted in the six months to September 2020.
This was mainly owing to a significant decline in finance charges, fair value movements and foreign exchange losses compared with the prior period, Telkom said in a trading update on October 29.
Finance charges, fair value movements and foreign exchange losses declined by 35% to R659-million during the six months ended September 30, 2021.
Telkom attributed this to its funding strategy and the ongoing settlement of maturing debt, which resulted in finance charges reducing by 25% to R541-million.
“Our conservative funding approach enabled us to strengthen our balance sheet by repaying maturing debt of about 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 remains balanced,” Telkom commented.
Further, fair value movements and foreign exchange losses reduced significantly by more than 90% from R209-million in the prior corresponding period to R17-million, owing to currency volatility and favourable foreign exchange hedging position.
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