Restatements and adjustments

Restatements

In FY2021, BCX identified that certain costs of third-party service expenses incurred on a customer contract had been incorrectly accounted for over the term of the customer contract since 2018.

The restatement impacted the Group income statement and resulted in other operating expenses being understated for the year ended 31 March 2020.

The 31 March 2020 comparative financial information was restated.

Pro forma financial information

Certain financial information presented in this results announcement constitutes pro forma financial information in terms of the JSE Listings Requirements. The pro forma financial information is presented to assist the reader to analyse the underlying performance of Telkom.

The pro forma adjustments include the impact of VSP, VERP and S189 costs of R270 million and the related tax impact of R76 million in FY2021, and R1 186 million and the related tax impact of
R332 million in FY2020. Unless otherwise stated, the pro forma consolidated income statement and all related key performance indicators (KPIs) and messages in this results announcement are based on this adjusted base.

The applicable criteria on which this pro forma financial information is reported and prepared for the year ended 31 March 2021 are set out below.

Pro forma adjustments

VSP, VERP and S189

The pro forma adjustments for the current financial year include the impact of the VSP, VERP and S189 costs of R270 million and related tax impact of R76 million.

March 2020

The pro forma adjustments for FY2020 include the impact of the VSP, VERP and S189 costs of R1 186 million and related tax impact of R332 million.

In the published results for the year ended 31 March 2020, pro forma financial information excluded the impact of VSP and VERP costs as well as an additional impairment provision of receivables of R626 million relating to COVID-19. The pro forma results were also presented on IAS 17 basis to achieve comparison with prior year. The pro forma financial information for the year ended 31 March 2020 has been restated to include the additional impairment of receivables provision of R626 million recognised in the prior year as the COVID-19 impact has become a norm. In addition, the financial information is reported on an IFRS 16 pro forma basis.

Segment reporting

Segment reporting is provided in note 4 as part of the notes to the financial statements.

Results from operations

Group profit after tax increased 88.1%** to R2 622 million** (FY2020: R1 394 million**). This is mainly attributable to higher earnings before interest, taxation, depreciation and amortisation (EBITDA) due to resilient Group revenue as well as our continued efforts in containing costs. Our total expenses declined by 3.5% mainly driven by lower cost of handsets, equipment and directories expenses and employee expenses, as we realise benefits from our Restructuring programme. This was partially offset by an increase in the tax expense, mainly as a result of higher taxable income. Headline earnings per share (HEPS) increased 53.4%** to 561.5** cents per share.

The pro forma financial information for the year ended 31 March 2020 has been restated and presented on a consistent basis with the pro forma financial information for the year ended 31 March 2020.