Headline earnings per share (HEPS) and reported basic earnings per share (BEPS) are expected to decrease by between 45% and 55%.<\/p>\n
Telkom had many excuses for its poor performance, including a changing mobile subscriber mix and higher maintenance and service costs.<\/p>\n
The share price declined sharply on the news, signalling that investors have lost trust in the company.<\/p>\n
The latest share price decline followed a 24% decline a month ago after MTN announced it had walked away from talks to buy Telkom.<\/p>\n
MTN allegedly stopped negotiations because Telkom could not guarantee exclusivity, and there were concerns about Competition Commission approvals.<\/p>\n
Telkom has valuable assets, including spectrum, an extensive fibre network, and a great tower and property portfolio, but the market has no trust in the company to unlock value.<\/p>\n
![\"\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2022\/11\/Nick-Kunze.jpg\")
<\/a>Nick Kunze, Sanlam Private Wealth<\/p><\/div>\n
Nick Kunze from Sanlam Private Wealth said there are many reasons the market does not like Telkom and why shareholders are dumping the stock.<\/p>\n
\u201cAs much as its mobile business has grown, its recent earnings missed estimates, and it will battle to compete with the big guys,\u201d Kunze told Financial Mail.<\/p>\n
\u201cNow that MTN has walked away, I don\u2019t know what\u2019s in the offing. A lot of the premium in the share price was due to takeover talk, and that\u2019s unlikely to come back any time soon.\u201d<\/p>\n
Ashraf Mohamed from Cornerpiece Capital said Telkom started to move away from its legacy business with new fibre products.<\/p>\n
However, competition increased with Vumatel, Vodacom, MTN, and Rain offering affordable broadband access, and Telkom has lost momentum.<\/p>\n
\u201cWhat was a fast-growing business with a high margin is slowing. It raises the question of where growth for Telkom is going to come from,\u201d he said.<\/p>\n
\u201cWhat will management tell us next week when they release their results? My expectation is no good news.\u201d<\/p>\n
Mohamed sees Telkom as a value trap with a fair value between R25 and R30 per share.<\/p>\n
\n
This article was first published by Daily Investor<\/a><\/strong> and is republished with permission.<\/em><\/p>\n Investors have no trust that Telkom can unlock value from its substantial assets.<\/p>\n","protected":false},"author":341108,"featured_media":408946,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[80335],"tags":[33577,82799,35,42,82801,33386,43716,40002,109,41,25299],"class_list":["post-469841","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-ashraf-mohamed","tag-cornerpiece-capital","tag-headline","tag-mtn","tag-nick-kunze","tag-openserve","tag-rain","tag-sanlam","tag-telkom","tag-vodacom","tag-vumatel"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/469841"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341108"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=469841"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/469841\/revisions"}],"predecessor-version":[{"id":469849,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/469841\/revisions\/469849"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/408946"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=469841"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=469841"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=469841"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Now read:\u00a0How Telkom makes money \u2014\u00a0and where it spends money<\/a><\/h2>\n","protected":false},"excerpt":{"rendered":"