Market cheers as Telkom rings in robust results

The market on Tuesday cheered as Telkom rang in robust results for the year ended 31 March and resumed its dividend, which saw its share surge 7%.

In morning trade the share was up 7.35% at R42.95 on the JSE.

Telkom said mobile subscribers were up 13.4% to 23.2 million.

Serame Taukobong, Telkom Group CEO said, “The company has largely modernised its technology infrastructure and executed on a robust, detailed strategy across its operations. The financial results for FY2025 confirm that the business has not only stabilised but has built a platform for accelerated growth." 

In key financial metrics, adjusted headline earnings per share rose 102.4% to 583.2 cents; while adjusted basic earnings per share were up 128.9% to 681.7 cents. Ebitda was up 25.1% to R11.8 billion; while revenue rose 3.3% to R43.9bn; with free cash flow up 555.2% to R2.8bn.

Taukobong said Telkom's differentiated strategy over the past year centred on three key pillars:

• The first pillar was sales engine optimisation. "We engineered our sales engine to prioritise efficiency, streamlining regional teams into agile, data-driven units and investing in digital tools to empower frontline teams."
• The second pillar was network excellence. "We prioritised strategic investments in our infrastructure, expanding fibre and 4G/5G coverage to underserved areas while enhancing urban network performance."
• The final pillar was customer-centric value. "We continued disrupting the market by expanding our flexible, affordable plans tailored to diverse segments, from data-centric bundles for cost-conscious users to seamless connectivity solutions for small, medium and large enterprises. We supported these with transparent pricing and proactive service," he said.

Taukobong said in a significant milestone, Telkom had successfully concluded the disposal of Swiftnet, the masts and towers business to the consortium led by Actis and Royal Bafokeng Holdings with a total cash consideration of R6. 618bn received on March 27.

"We are strategically dedicating R4 750 million of the proceeds post year end to strengthen our balance sheet. This deliberate move is aimed at fortifying the balance sheet for future growth, fuelling innovation, and ensuring we maintain a competitive edge in a dynamic market. The remaining proceeds are earmarked for profit-enhancing capital investments as well as a special distribution to shareholders," he said.

The group reinstated its dividend, saying it will return a total dividend of R1.3bn, which includes an ordinary cash dividend of R833 million (163 cents per share) and a special dividend of R500 million (98 cents per share) from the completed disposal of the Swiftnet masts and towers business, resulting in 261 cents per share being returned to Telkom shareholders.

Across its various segments, Telkom reported notable growth. Telkom Consumer saw a 10.2% increase in mobile service revenue, supported by a 19.5% rise in its mobile data subscriber base, which reached 15.2 million. Openserve recorded a 5.9% increase in fibre-related data revenue and achieved a market-leading fibre-to-the-home connectivity rate of 50.4%. BCX posted a 12.7% increase in fibre-related data revenue, along with a 5.8% growth in cloud services revenue. Gyro, Telkom’s standalone infrastructure subsidiary, contributed to improved liquidity by realising total cash proceeds of R730 million from the transfer of 57 properties.

Looking ahead, Telkom said its medium-term roadmap leverages its current momentum as it sets "ambitious yet achievable objectives for the next three years".

Maintaining a strong balance sheet remains a top priority; a focus on efficiency as well as  monetising infrastructure assets and improving medium- to long-term returns.

"Essential to achieving these financial targets is continued stability in South Africa, a growing economy supported by a macro-economic environment that does not deteriorate from current levels, and a stabilised energy supply. While their impact is not yet visible, recently escalated global tensions and emerging trade wars could limit South Africa's economic growth, " Telkom said.

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