18 May - 3 min read

Trading Statement

Trading Statement

Telkom SA SOC Limited
Registration number 1991/005476/30)
JSE share code: TKG
JSE bond code: BITEL
ISIN: ZAE000044897

("Telkom" or “the Group”)

Trading Statement

Shareholders are advised that Telkom is currently finalising its annual results for the year ended 31 March
2021 (“FY 2021” or “the current year”), which will be released on the Stock Exchange News Service
(“SENS”) of the JSE Limited (“JSE”) on 24 May 2021.

In accordance with paragraph 3.4(b) of the Listings Requirements of the JSE, shareholders are advised
that reported headline earnings per share (HEPS) is expected to increase by 145% to 155%, while
reported basic earnings per share (BEPS) is expected to increase by 300% to 310% compared to the prior
year ended 31 March 2020 (“the prior year”). This was mainly due to the significant growth in reported
Group EBITDA of approximately 20% compared to the prior year and a reduction in the reported effective
tax rate from 37.6% to 30.5% in the current year.

The strong performance includes the impact of voluntary severance packages , voluntary early retirement
and section 189 retrenchment packages (VSP/VERP and retrenchments) of R270 million and the related
tax impact of R76 million in the current year while prior year earnings includes R1 186 million and the
related tax impact of R332 million relating to VSP/VERP and retrenchments. The impairment of
receivables and contract assets remains high, in line with the prior year, which included a provision of
R626 million reflecting the uncertain environment relating to Covid-19.

The Group achieved strong underlying performance with solid growth in underlying operating profit driven
by strong growth in underlying Group EBITDA compared to the prior year. The growth in underlying Group
EBITDA was underpinned by a robust performance in the Mobile business and effective and sustainable
cost management. The mobile business continued its growth trajectory in service revenue while the overall
sustainable cost management program outperformed management’s expectations.

                       31 March 2020                                  31 March 2021

                       Reported           Expected ranges        Movement                      Expected
                       Earnings                                  (cents)                       earnings
                       (cents)
  BEPS
     Reported               121.1         300%-310% higher       363.3 to 375.4 cps higher     484.4 to 496.5 cps
  HEPS
     Reported               208.1         145%-155% higher       301.8 to 322.6 cps higher     509.9 to 530.7 cps

The difference between BEPS and HEPS recorded in FY2021 is due to the impairment of assets and profit
or loss on sale of assets.

The above information has not been reviewed or reported on by Telkom’s independent external auditors.
In accordance with the JSE Listings Requirements a trading statement should be based on previously
published earnings. The published prior year normalised earnings excluded the impact of IFRS 16 and
the additional expected credit loss provision of R626 million that was recognised as a result of COVID 19,
for comparison purposes. The current year normalised earnings will be based on IFRS 16 and will include
the impact of COVID 19, and as such are not comparable to the published prior year normalised earnings.
The normalised earnings for the current year reflecting underlying performance will be published on results
release date.

The Group's annual results for the year ended 31 March 2021 will be released on SENS on 24 May 2021
with a virtual presentation in Centurion on the same day. The presentation will be available for all
stakeholders on the Group's website, www.telkom.co.za/ir. A live presentation will be webcast (a link will
be available on Group’s website) and a live broadcast on BDTV (Channel 412 on DSTV) at 11 am.

Centurion
18 May 2021

Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited

Date: 18-05-2021 11:00:00
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