Job cuts cost Telkom R2.2bn

HEPS set to fall by between 40% and 50%.

Telkom is expected to take a big hit to earnings as the result of staff reduction costs, with headline earnings per share set to fall by between 40% and 50% for the year ended 31 March 2016.

Basic earnings per share are expected to be between 20% and 30% lower, the telecommunications group warned shareholders in a trading statement on Monday.

The results include the impact of Telkom’s voluntary early retirement and severance packages offered to employees of about R2.2 billion, with a related tax impact of approximately R500 million. During the year, about 4 200 employees accepted packages.

“On a normalised basis — excluding the impact of voluntary early retirement and voluntary severance packages and the related tax benefit, headline earnings per share are expected to increase by 10% to 20% and basic earnings per share are expected to increase by 30% to 40%,” Telkom said in the trading statement.

The main difference between basic and headline earnings per share is increased profit from the sale of property recorded during the financial year.

Telkom, which is expected to publish its annual results on June 6, said the earnings guidance includes the performance of IT services acquisition Business Connexion, which has been incorporated for seven months.

Telkom’s share price was trading higher by about 2% shortly before it issued the trading statement. The counter has lost 26% of its value in the past 12 months.

This article was first published on TechCentral. To access the original, please click here.

COMMENTS   1

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works out to about R500k per employee!!! if that makes good business sense then i just don’t know!!!

End of comments.

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