Smoke and mir­rors

Finweek English Edition - - Marketplace -

The tele­coms group’s re­sults were a mas­ter class in dou­ble speak with smoke and mir­rors added for ex­tra ef­fect. Rev­enue is up by 6.7% (but de­creased by 18.5%). Con­fused? The small print tells the story that rev­enue in con­stant cur­rency was up 6.7%, but ac­tual rev­enue as re­ported was down 18.5% and the lat­ter num­ber is the one that mat­ters. Now, sure, con­stant cur­rency is im­por­tant for in­vestors in or­der to get an un­der­stand­ing of how the ac­tual un­der­ly­ing busi­nesses are do­ing, but don’t mix the mes­sage. Give us the real num­bers up front rather than try­ing to fudge them. The re­al­ity is that cur­ren­cies move and some­times this will in­crease prof­its and at other times they’ll hurt. Dig­ging into the re­sults, we can see that di­luted head­line earn­ings per share (HEPS) was 212c com­pared with a loss of 271c in the pre­vi­ous year. But 2016 is not a fair com­par­i­son and go­ing back to 2015 (in other words be­fore the Nigerian fine) we see in the six months to June 2016 HEPS was 654c while the six months to June 2014 HEPS was 729c. In short, these re­sults are a shocker.

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