Telkom (TKG) Q1 2027 TU earnings summary

Executive summary

• Group revenue grew 2.6% year-over-year to R11,096 million, driven by strong mobile and fiber-related data revenue growth, offsetting declines in traditional fixed revenue.

• EBITDA increased by 10% year-over-year to R3,079 million, with margin expanding to 27.7% due to disciplined cost management and lower expenses.

• Mobile service revenue led the market, with prepaid service revenue up 9.1% and total mobile subscribers rising 6.1% to 25.3 million; mobile data subscribers up 15.5% to 19.8 million.

• Openserve delivered solid revenue growth, with external revenue up 18.2% and a connectivity rate of 53.9%, with homes connected rising 16.6% to 843,563.

• BCX revenue declined 10.9% year-over-year, but cybersecurity and cloud services posted robust growth, and turnaround efforts are underway.

Financial highlights

• Group revenue reached ZAR 11.1 billion, up 2.6% year-over-year, with group data revenue rising 8.8% to R6,922 million.

• Group EBITDA was ZAR 3.1 billion, with margin expanding to 27.7% and double-digit EBITDA growth.

• Telkom Consumer revenue rose 5.3% to ZAR 7.3 billion; Openserve revenue increased 5.6% to ZAR 3.3 billion.

• BCX revenue declined to ZAR 2.6 billion from ZAR 2.9 billion.

• CapEx for the quarter was ZAR 888 million, mainly in mobile and Openserve, with group CapEx intensity at 8%.

Outlook and guidance

• Management reaffirmed medium-term guidance, expecting group EBITDA margin within 25%-27% and capex intensity within 12%-15% for the year.

• Mobile service revenue is expected to grow mid-single digits or above, with focus on prepaid and underserved regions.

• Openserve will prioritize external wholesale revenue growth, network utilization, and operational efficiency.

• BCX turnaround is expected to take 18 months, focusing on scalable, high-margin offerings and digital transformation.

• CapEx intensity is expected to ramp up to 12%-15% for the full year.