Telkom turnaround: Mobile data and subscriber increase drive profit surge

The Money Show's Stephen Grootes talks to CFO Nonkululeko Dlamin after Telkom posts its results for the year to end-March 2025.

Telkom has reported a strong performance for the year ended 31 March 2025, driven by 'consistent momentum' across all business units.

It posted a 44% leap in headline earnings per share (HEPS) for the financial year.

The Group says mobile service revenue continued to outpace reported South African mobile market growth rates, while subscriber numbers demonstrated strong growth.

It reported double-digit growth in mobile and fixed data traffic.

Telecommunications infrastructure arm Openserve also delivered improved results, driven by strong fibre-related revenue and an enhanced connection rate for fibre to home.

Telkom's mobile subscriber base grew 13.2% to 23.2 million, and its mobile DATA subscriber base was up 19.5% to 15.2 million.

The Group reinstated a dividend after a four-year suspension, returning R1.3 billion or R2.61 per share to shareholders.

RESULTS HIGHLIGHTS:

Group revenue up 3.3% to R43 880m tthanks to strong growth in mobile service revenue up 10.2% and fibre-related data revenue up 10.0%
Group adjusted EBITDA(1),(2),(3) significantly up by 25.1% to R11 792m
Group adjusted EBITDA margin(1),(2),(3) expanded by 4.7 percentage points to 26.9% thanks to cost-optimisation initiatives
Positive free cash flow(2) of R2 778m, resulting from strong operating cash generation, a R2 354m improvement
Balance sheet strength restored with net debt(2) to Group adjusted EBITDA(1),(2),(3) down from 1.8x to 0.6x and interest-bearing debt reduced by R2 600m
Dividend resumption - 163 cents per share (cps) ordinary dividend declared off strong operational performance plus a 98 cps special dividend
Masts and towers disposal concluded, with R6 618m cash proceeds received

Group chief financial officer Nonkululeko Dlamini says Telkom's strong performance is largely driven by their data-led strategy.

"Data is actually the new currency because a lot of things are happening through data and we've seen the impact of that on our performance, with 10.2% growth coming just from the mobile service revenue."

Nonkululeko Dlamini, Group CFO - Telkom

The growth in their subscriber base she attributes to Telkom's value proposition.

"We've got a combination of our post-paid as well as pre-paid customers and the focus really is indeed the utilisation of data... We believe our value proposition is quite cost-effective, and we've seen that increase coming through both from the subscriber base as well as the revenue."

Nonkululeko Dlamini, Group CFO - Telkom

Scroll up to the audio player to listen to the interview