Telkom (TKG) H2 2025 (Q&A) earnings summary

Executive summary

• Achieved strong FY2025 results with group revenue up 3.3% to R43.9 billion and adjusted EBITDA up 25.1% to R11.8 billion, driven by a data-led strategy and operational efficiencies.

• Successfully executed the disposal of Swiftnet, generating R6.6 billion in cash, used for debt reduction, shareholder returns, and capital investment.

• Dividend policy reinstated after four years, returning R1.3 billion to shareholders via ordinary and special dividends.

• Embedded sustainability and innovation, with reductions in emissions, increased renewable energy use, and impactful community investments.

• Focused on cost optimisation, network expansion, and digital transformation across all business units.

Financial highlights

• Group revenue increased 3.3% year-over-year to R43.9 billion; adjusted EBITDA margin expanded by 4.7 percentage points to 26.9%.

• Free cash flow rose 555.2% to R2.8 billion; cost-to-income ratio improved to 75.1% from 78.4% in FY24.

• Net debt to adjusted EBITDA reduced to 0.6x from 1.8x, reflecting improved liquidity and lower leverage.

• Headline earnings per share from continuing operations rose 62.2% to 467.5c; basic EPS up 128.9% to 1,528c.

• Capex from continuing operations at R5.83 billion, with a capex-to-revenue ratio of 13.3%.

Outlook and guidance

• Targeting mid-single-digit revenue growth and EBITDA margin of 25–27% through FY2028.

• Capex to revenue ratio expected at 12–15%; net debt to EBITDA to be maintained between 0.5x and 1.5x.

• Focus on expanding mobile and fibre connectivity, accelerating IT services, and disciplined capital allocation.