South African operator Telkom warned that its earnings for the fiscal first half will be lower than in the year-earlier period. Normalised headline earnings a share (HEPS) for the six months ended 30 September are expected to be up to 20 percent lower than 280.6 cents a share a year before. A number of factors negatively impacted profits for the six months ended 30 September, including the 7.5 percent salary increases agreed with unions and ZAR 144 million in costs for workforce reduction. Telkom also spent ZAR 205 million on the launch of its mobile service 8ta. Higher fair value and exchange rate losses were incurred owing to the strengthening of the rand. and the group earned lower investment income as a result of lower cash balances. The group pointed out that it had also incurred significant one-off costs, including a ZAR 201 million impairment on its Multi-Links Nigeria business and a ZAR 60 million secondary tax on companies charge on a special dividend that was paid. HEPS, including the tax and the fair value loss on Vodacom shares in the 2010 financial year, would be between 240 percent and 260 percent higher than the loss of 160.2 percent a share incurred in the six months ended September 2009. Telkom's results will be published on 22 November.
