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Telkom H1 earnings drop 67%

Fixed-line usage shrank by 12 percent but mobile revenue increased by 5 percent.

Telkom Towers. Picture: Telkom website.

JOHANNESBURG - Telkom SA, South Africa's biggest landline provider, posted an expected 67 percent drop in first-half earnings on Monday, hit in part by restructuring costs after it had to let go hundreds of workers.

Telkom reported diluted headline earnings of 212.1 cents a share for the six months to 30 September, from a restated 649.8 cents a year earlier. Headline EPS, the main measure of profit in South Africa, excludes certain one-off items.

The company said it laid off more than 400 managers whose voluntary retrenchment and severance packages cost R325 million ($29 million). Last year's results were also inflated by a one-time gain related to medical aid benefits for retired employees.

Telkom said total revenue declined slightly to R16.2 billion as fixed-line usage shrank by 12 percent. However, mobile revenue increased by 5 percent.

"Operating revenue decreased due to the continuous decline in fixed-line voice revenue and lower data leased line revenue resulting from self-provisioning by other licensed operators," Telkom said in a statement.

Telkom shares have more than double so far this year, augmenting a rise of nearly 70 percent in 2013.