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Telkom will delay the publication of its annual results in almost a month, since the telecommunications group will not be able to finalize them before May 25, as previously anticipated, as a result of the national closure.
It now expects to publish the results on June 22, and its annual report will follow on August 7, it said in a statement to shareholders on Tuesday.
“Telkom will use the two-month extension period granted to issuers (listed companies) by the end of the year from December 31, 2019, January 31, 2020, February 29, 2020, and March 31, 2020. The institution of the Blocking has impeded the company’s ability to complete the work necessary to finalize the annual results by May 25, 2020, and consequently the board of directors deems it prudent and in the best interest of the company to use the extension period of two months, “he said.
The institution of the blockade has prevented the company from completing the work necessary to finalize the annual results before May 25.
He said investors “should not draw undue adverse inferences as a result of the company making use of the available extension period.”
The detailed statement also provided an update on Telkom’s debt, its reduction program, and the steps it has taken in light of the Covid-19 pandemic and associated blockade.
Eighty percent of its employees are working from home, he said, while his front-line staff and field service technicians continue to serve customers.
“Telecommunications have been declared an essential service in the country and we can continue connecting South Africans. During the blockade, Telkom has seen an increase in fixed and mobile network traffic for our telecommunications services by people who work from home. Telkom has a scalable network and enough redundancy to manage the increased demand, “he said.
“Evidence of Disability”
He warned that his businesses are exposed to all sectors of the economy, including those in difficulty as a result of the blockade, adding that the impact on his financial performance is still being evaluated.
He said his market capitalization has dipped below its net asset value in recent months due to a sharp decline in its share price. This suggests “reasons for impairment testing” in accordance with the relevant accounting standards. “This will be considered in conjunction with the impact of Covid-19 on our business.”
Preserving cash and maintaining a flexible balance has become extremely important and urgent during the Covid-19 pandemic, as the economy is under strain, Telkom added. “Our conservative approach to financing ensured that we continue to have a healthy balance sheet.”
His net debt with Ebitda (earnings before interest, taxes, depreciation and amortization) was 1.2x (1.4x including lease liabilities) on September 30, 2019. In the second half of the year, he strengthened his balance sheet by paying the paper expired commercial loan of R800 million. It also refinanced a debt of R2.5 billion at “favorable interest rate levels.”
“We have expanded the maturity profile of our debt to reduce the risk of refinancing the debt book. Telkom has enough existing committed facilities with banks amounting to R5.7 billion. “
Telkom also said that the cash outflow related to its current restructuring process and a tax liability of R875 million, which will be decided by the constitutional court, will be financed with cash balances. The cost of the restructuring process has been reduced from R1.5 billion to R1.2 billion as a result of the postponement of the reductions during the closure, he added. – © 2020 NewsCentral Media
