Telkom (TKG) H2 2025 earnings summary

Executive summary

• Achieved 3.3% year-over-year revenue growth, driven by a data-led strategy and operational efficiency.

• Significant improvement in free cash flow by ZAR 2.4 billion, with ZAR 1.3 billion returned to shareholders.

• Divested non-core assets, notably Swiftnet, resulting in a ZAR 4.4 billion gain and ZAR 6.6 billion cash inflow.

• Maintained focus on sustainability, reducing fuel usage by 47% and emissions by 11%.

• Reinstated dividend policy, declaring ZAR 1.3 billion in total dividends, including a special dividend from Swiftnet proceeds.

Financial highlights

• EBITDA margin expanded to 25.1% (26.9% adjusted for once-off costs), up from 22.2% two years prior.

• Headline earnings per share on continuing operations showed significant growth, reflecting underlying business strength.

• Effective tax rate dropped to 19.1% due to significant transactions, compared to 25.5% last year.

• Return on invested capital improved from 3.5% to 11% over three years.

• Cash balance increased to ZAR 11 billion, with ZAR 2.6 billion debt repaid and no refinancing required.

Outlook and guidance

• Revenue growth guidance raised to mid-single digits for the next three years.

• EBITDA margin targets set for each business unit, aiming for group margin expansion (mobile to 28% by 2028, OpenServe 35-65 split, BCX 12.5%).

• Capital intensity to remain at 12-15%; net debt to EBITDA guidance set at 0.5-1.5x, currently at 0.6x.

• Continued focus on cost optimization, operational efficiency, and prudent capital deployment.