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Telkom earnings to fall by 70%?
Telkom is expecting to see a dramatic decline in earnings - with basic earnings per share forecast to fall by 70% for the period - as a result of losses from its mobile phone business, 8ta. Furthermore, the sale of its Nigerian Multi-Links business - awaiting approval from the Nigerian Securities Exchange - will result in losses of R650-million for the company.
Business Day reports that the potential losses from Multi-Links have not been included in the forecast results. Telkom says its losses are also due to a R450-million impairment from corporate data provider iWayAfrica, an amalgamation of Africa Online and Mweb Africa, bought by Telkom in February 2007 and April 2009 respectively.
Excluding the impairment costs from iWayAfrica, the earnings are likely to be 40% lower.
It says that high customer churn and a weakening exchange rate affected its iWayAfrica and Mweb Africa operations. Its revenue from fixed-line activities has declined by around 14% while its data revenues have fallen by 6%.
8ta has lost about R900-million for the five months ending September but Telkom says the business is progressing "satisfactorily" and is in line with its expectations. Its final results are due out on 22 November.
Read the full article on www.businessday.co.za/.
