Telkom (TKG) H1 2025 earnings summary

Executive summary

• Data-led strategy drove strong interim results, with 1.9% revenue growth to R21.4 billion, robust mobile and fiber data performance, and progress on midterm targets.

• Adjusted EBITDA rose 18.3% to R5.6 billion, with margin up 3.6ppts to 26.2%, reflecting effective cost optimisation and operational leverage.

• Free cash flow turned positive at R768 million, supported by improved operational performance and working capital management.

• Balance sheet resilience improved through debt reduction, retirement fund restructuring, and non-core asset disposals.

• Continued investment in future growth, with a focus on cost efficiency, smart capital allocation, and sustainability initiatives.

Financial highlights

• Group revenue from continuing operations grew 1.9% year-over-year to R21.4 billion, driven by 10% growth in mobile services and 15.5% in fiber-related revenue.

• Adjusted EBITDA increased 18.3% to R5.6 billion, with margin at 26.2%.

• Adjusted HEPS rose 68% to 262.6c, and adjusted BEPS up 78.9% to 288.9c.

• Net debt to adjusted EBITDA improved to 1.3x, with interest-bearing debt reduced by R885 million.

• Capex-to-revenue ratio at 11.9%, with capital expenditure of R2,543 million.

Outlook and guidance

• Medium-term guidance maintained: low to mid-single digit revenue and EBITDA growth, capex intensity of 12–15%, and net debt to EBITDA of 1.5x–1.9x.

• Focus on sustaining positive free cash flow, further cost optimisation, and continued investment in mobile and fibre network expansion.

• Group aims to maintain a 25% cost to 75% income ratio for continuing operations in the medium term.