Telkom has completed the sale of its masts and towers business Swiftnet, a move that pushed up earnings fourfold in its current financial year.
In a trading update on Friday, the state-affiliated group said it successfully closed out the sale of Swiftnet on March 17. The provisional consideration received in cash amounted to R6.575bn.
Earlier in the week, Telkom said the suspensive conditions to proceed to closing of the disposal had been fulfilled other than standard suspensive conditions, which run until the business day before closing.
In April last year, Telkom announced the planned sale of its masts and towers business, housed in Swiftnet, to a consortium consisting of an infrastructure fund managed by a subsidiary of Actis and an infrastructure vehicle 100% owned by Royal Bafokeng Holdings.
The cash receipt has had the effect of driving up earnings, the group said.
Telkom said its basic earnings per share were expected to be 300% higher for the year to end-March 2025 at a minimum of 1,542c.
“The increase in reported earnings is mainly due to the profit made on the sale of Swiftnet, a non-recurring item impacting the current year results,” Telkom said.
As such, headline earnings per share (HEPS), which strip out the effect of one-off financial events, were expected at a minimum of 413.6c, a 10% increase.
A further trading update is expected once the group has a firmer understanding of its financial position for the period.
Swiftnet owns and operates about 3,900 commercially viable masts and towers in SA. In December, the Independent Communications Authority of SA (Icasa) gave Telkom the green light for the disposal. The Competition Commission and shareholders had already approved the transaction.
Telkom shares closed up 0.91% at R37.58 on Friday after touching an intraday high of R38.96.
The group expects to release its full-year financial results on June 10.
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