Telkom (TKG) H1 2025 (Q&A) earnings summary

Executive summary

• Achieved 1.9% year-over-year revenue growth to R21.4 billion, driven by strong mobile and fibre data service demand and a data-led strategy.

• Adjusted EBITDA rose 18.3% to R5.6 billion, with margin up 3.6 ppts to 26.2% due to cost optimisation and smart capex investments.

• Free cash flow turned positive at R768 million, up 260.7% from a negative R478 million in the prior period.

• Monetisation of non-core assets and the successful conversion of the retirement fund to a defined contribution plan further strengthened the balance sheet.

• Adjusted profit after tax from continuing operations increased 80.3% to R1.4 billion.

Financial highlights

• Group revenue from continuing operations grew 1.9% year-over-year to R21.4 billion, with mobile service revenue up 10.0% to R10.2 billion and fibre data service revenue up 15.5% to R3.7 billion.

• Adjusted EBITDA increased 18.3% to R5.6 billion, with margin up 3.6ppts to 26.2%.

• Adjusted HEPS rose 68.0% to 262.6c, and adjusted profit after tax increased 80.3% to R1.4 billion.

• Free cash flow improved to R768 million.

• Net debt reduced by R2.1 billion to R14.8 billion; net debt to adjusted EBITDA improved to 1.3x from 1.8x.

Outlook and guidance

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

• Margin guidance targets 26-28% over the next two to three years, balancing acquisition and retention investments.

• Focus remains on disciplined execution of the data-led strategy, smart investments, and reshaping for a digital future.

• Positive outlook for FY2025, with focus on sustaining positive free cash flow and maintaining a strong balance sheet.

• Targeting a sustainable 25% cost to 75% income ratio for continuing operations in the medium term.