Perfect storm hits Telkom
of a sharp decline in earnings for its financial year ended March 2023. This is on the back of a provision for a shock R13-billion impairment of assets being mulled by the board.
The profit warning, issued before markets opened in Johannesburg on Wednesday, sent Telkom’s shares plunging lower. They were trading almost 30% lower at R22.11 apiece shortly after markets opened.“Shareholders are advised that the board is currently considering an impairment-of-assets charge in respect of the group’s cash-generating units, namely Openserve, Telkom Consumer, Gyro and BCX, in the amount of approximately R13-billion .
“The non-cash impairment charge that may materialise following the review by the board will not impact the group’s earnings before interest, tax, depreciation and amortisation generated from operations [and] will have no impact on Telkom’s cash position. Nor will it impact the group’s compliance with debt covenants and its ability to fund its capital expenditure programme,” it said.
Restructuring costs and “marginal” revenue growth due to consumers’ moving away from the company’s legacy products both contributed to the collapse in earnings, as did the “deliberate upfront investment in working capital for handsets and equipment [and] costs associated with the impact of accelerated load shedding caused by an unreliable power supply”. There were also “inflationary cost pressures”.will also take a big hit to earnings due to the impairment charge.
“The difference between the Beps and Heps … is due to the net impact of the impairment of assets and the profit/loss on the sale of assets,” the company explained.Normalised Beps, which excludes the R13-billion and once-off restructuring costs of R1.1-billion and a related tax impact of R288-million, will still decline by as much as 90%. Normalised Heps – which also excludes the once-off restructuring costs and the once-off impairment charge, will decline by as much as 80%..
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Gordhan undermined Eskom management: De Ruyter - TechCentralThe public enterprises minister undermined upper management, disrupting efforts to end the nation’s energy crisis, said former CEO André de Ruyter.
Read more »
South Africa shoots itself in the foot - again - TechCentralThe diplomatic fallout between South Africa and the US couldn't have come at a worse possible time.
Read more »
New CEO 'excited' to help transform Twitter - TechCentralNewly appointed Twitter CEO Linda Yaccarino said she is excited to help to transform the social media platform.
Read more »
Fintech specialist e4 sold in R1-billion private equity deal - TechCentralSpecialist fintech company e4 has been acquired by a consortium of private equity investors.
Read more »
AvertITD - for dedicated cybersecurity - TechCentralPromoted | AvertIT Distribution is a specialised distributor of software and security systems, from Avast to AVG.
Read more »
Unleashing the 'wow factor' with Samsung's 2023 TV line-up - TechCentralPromoted | Early ordering is now available in South Africa for Samsung’s incredible 2023 television line-up.
Read more »