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Telkom suspends dividend for 3 years after profit slide

The steep earnings drop was also a result of a R1.2 billion ($69.1 million) one-off cost relating to voluntary severance and early retirement packages for 2,200 workers who left in March as part of a restructuring plan.

Telkom Direct store. Picture: Facebook.

JOHANNESBURG - Telkom suspended dividends for three years on Monday after a 66% slump in full-year earnings it attributed to the coronavirus crisis.

The steep earnings drop was also a result of a R1.2 billion ($69.1 million) one-off cost relating to voluntary severance and early retirement packages for 2,200 workers who left in March as part of a restructuring plan.

Telkom, which is partly state-owned, declared a dividend of 50.1 cents per share but said it will suspend its dividend for the next three years and redirect the capital towards buying more airwave spectrum and its capital expenditure programme.

The company, which runs the country’s biggest fixed-line network, also withdraw its medium-term targets, citing exceptional economic weakness and heightened uncertainty.

Headline earnings per share (HEPS), the main profit measure in South Africa, fell to 208.1 cents in the year to March 31 from 619.2 cents a year earlier.

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