Telkom slashes H1 earnings forecast

Telkom SA slashed its half-year earnings forecast by up to 70% from a year ago, citing costs related to an ongoing restructuring process.

The company now expects earnings of between 390 and 455 South African cents per share, down by up to 70% from a year ago, for the six months ended Sept. 30.

Telkom said it had set aside R234 million ($21 million) after tax for retrenchment, voluntary severance and retirements packages. It also has a 2.2 billion rand net curtailment gain related to post-retirement medical aid liability.

The telecoms provider had said it needed to cut jobs from a management layer of 2,650 posts as part of a drive to bring down costs by 1 billion rand annually for the next five years.

A union representing some of the workers told Reuters last month that 304 managers had chosen voluntary redundancy, but another 104 had yet to find jobs within the new company structure.

Telkom shares have more than doubled this year, making the stock one of the best performers on the Johannesburg stock exchange. - Reuters