Shares in Telkom soared almost 4% in early trade on Tuesday after the telecommunications group said in a trading statement before the opening that it expects a rise of 35% in basic earnings per share and a 55% surge in headline earnings per share for the year ended March 2005.
The annual results are expected to be released on June 6.
Telkom attributed the improved performance to “restructuring expenses and extending the useful lives of certain assets”.
A telecommunications analyst said the restructuring and the extension of the lifespan of assets will go a long way in lifting Telkom’s share price and underlines the fixed-line monopoly’s prospects.
At 11.11am, after 560 300 shares valued in excess of R61-million had changed hands, the stock was trading at R110,40 per share, up 2,65% or 285 cents higher from its previous close. Earlier, the share price moved as high as R111,80 per share — representing an impressive 3,95% improvement from the previous close.
Analysts surveyed by I-Net Bridge anticipate headline earnings per share of 1 095 cents — a figure that is in line with Telkom’s update. In addition, the phone group is expected to declare a dividend of 427 cents per share.
The telecommunications analyst also cited the group’s retrenchment policy as another factor that will help the company easily accomplish its targets.
“All of these things bode very well for the share price, which we think is still cheaper but attractive,” he said, adding that the trading update did not come as a surprise although it managed to “fantastically” drive the share price north. — I-Net Bridge