Telkom, the JSE-listed telecommunications firm, has reported a 1.6% increase in group revenue, reaching R43 billion. CEO Serame Taukobong announced the company's annual financial results for the year ending 31 March, highlighting strong operational performance and improved financial outcomes despite South Africa's challenging economic environment.
Telkom's data-led strategy resulted in a 6.8% growth in mobile service revenue, surpassing 20 million mobile subscribers. The firm achieved these results despite inflationary pressures and additional operating costs from power outages. Increased operating margins were driven by the demand for next-generation offerings, contributing to a 5.2% rise in normalized EBITDA to R10 billion. Reported EBITDA saw an 18.4% increase, considering non-recurring restructuring costs from the previous year.
Headline and basic earnings per share more than doubled, reaching 376 cents and 385.5 cents, respectively. Openserve's fiber connectivity rate rose to 48.5%, with over 1.2 million homes now passed with fiber. Subsidiary BCX saw growth in IT service revenue, and Swiftnet's tower rollout program further boosted revenue and margins.
Telkom invested R6.1 billion in network resilience, expanding mobile networks, modernizing fixed infrastructure, and enhancing ICT managed services. This included the deployment of new spectrum to improve service levels across retail, enterprise, and wholesale sectors. The approval of Swiftnet's disposal for R6.75 billion underscores shareholder support for strategic value enhancement.
Profit for the year increased by over 100% to R1.9 billion, driven by the absence of prior restructuring costs and lower depreciation, though higher interest rates raised net finance costs. Operational improvements also led to a R4 billion increase in cash generated from operations, excluding restructuring costs.
Telkom Consumer increased external revenue by 2.2% to R26.1 billion, with mobile operations contributing R22.5 billion, a 4.5% rise. Mobile data revenue grew by 10.6%, adding R14.3 billion to total mobile revenue. Cost optimization efforts resulted in a 24.2% EBITDA growth to R4 billion, expanding the EBITDA margin to 15.5%.
The mobile subscriber base grew by 11.9% to 20.4 million, with mobile broadband subscribers increasing by 9.5% to 12.7 million. The company invested R2.6 billion in mobile capex, including R972 million for spectrum, enhancing network coverage and resilience. Telkom's 4G device adoption rate exceeded 92%, and it has deployed 465 active 5G sites since launching 5G services in 2022.
A new dividend policy based on free cash flow and future capex needs has been approved, proposing a payout range of 30% to 40% of free cash flow, aligning Telkom's dividend yield with local telecommunications companies.
