Telkom (TKG) Q1 2025 TU earnings summary

Executive summary

• Group revenue increased 3.9% year-over-year to ZAR 10.9 billion, driven by strong demand for next generation (NGN) offerings and data-led strategies.

• EBITDA grew 24.1% to ZAR 2.8 billion, with margin improving to 25.5% due to top-line growth and cost management.

• Mobile subscribers rose 14.6% to over 21 million, with mobile data revenue up 12.9% and mobile service revenue up 9.5%.

• Homes connected with fibre grew 19.5% year-over-year to 615,430, with a connectivity rate of 49%.

• R161 million was realized from non-core property disposals, and Moody’s affirmed credit ratings with a stable outlook.

Financial highlights

• Group revenue: ZAR 10.9 billion (+3.9% y-o-y); NGN revenue: ZAR 8.8 billion (+7.0% y-o-y), now 80.7% of group revenue.

• Group EBITDA: ZAR 2.8 billion (+24.1% y-o-y); EBITDA margin: 25.5% (up from 21.3% in Q1 FY2024).

• Mobile revenue: ZAR 5.7 billion (+5.3% y-o-y); mobile data revenue: ZAR 3.8 billion (+12.9% y-o-y); mobile data traffic up 25.8%.

• Openserve revenue: ZAR 3 billion (-2.4% y-o-y, due to legacy voice decline); BCX revenue: ZAR 3.2 billion (+2.4% y-o-y); Swiftnet revenue: ZAR 343 million (+5.2% y-o-y).

• Group capex: ZAR 1.7 billion for the quarter.

Outlook and guidance

• CapEx guidance for mobile remains unchanged; current investment supports data traffic growth.

• Group targets maintaining EBITDA margin at 25% by FY2025, but expects EBITDA growth to moderate due to a higher base from Q2 FY2024.

• Ongoing focus on cost optimization, prudent capital allocation, and network monetization.

• Power-as-a-Service rollouts expected to contribute to Swiftnet revenue in FY2025.