Telecommunications company Telkom has reported a 1.9% increase in revenue, reaching R21.3 billion, with notable growth in mobile service revenue by 10% and fibre data service revenue by 15.5%. Telkom announced its interim financial results for the six months ending 30 September. Subsidiaries BCX and Openserve also posted strong results during this period. BCX’s IT services revenue saw a 1.9% increase, while Openserve’s fixed broadband traffic surged by 28.5%, contributing to a 15.5% rise in group fibre data service revenue.
Telkom’s group adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased by 18.3% to R5.6 billion, indicating improved operating leverage. The group’s adjusted EBITDA margin rose to 26.2%, a 3.6% increase from the previous period, reflecting ongoing broad-based cost optimisation initiatives.
Free cash flow remained positive at R768 million, benefiting from strong operating cash generation. The balance sheet strengthened, with interest-bearing debt reduced by R885 million, bringing the net debt to adjusted EBITDA ratio down to 1.3x from 1.8x as of 31 March 2024.
Serame Taukobong, Telkom group CEO, highlighted the consistent execution of the data-led strategy driving further profitable growth.
The results for the six months ended 30 September 2024 demonstrate a robust and steady underlying operational performance, building on the progress made in the previous year. We continued to monetise our diverse infrastructure asset base to build a strong cash-generating business for the long-term. Simultaneously, we progressed the disposal of non-core assets to invest in future growth.”
Group revenue grew by 1.9%, driven by strong demand for data services, with mobile service revenue increasing by 10%, fibre data service revenue up by 15.5%, and IT services revenue rising by 1.9%, offsetting declines in fixed voice and legacy data services.
Our next-generation broadband offerings, enabled by ongoing capital investment in our networks, have positioned Telkom as the best-value mobile network in South Africa. In line with our connect-led strategy for our fibre assets, we maintained a high market-leading home connection rate of 49.7% for the period.
Serame Taukobong
Telkom Consumer’s mobile subscribers now total 22.8 million, with a 19.6% increase in its mobile data subscriber base to 14.6 million. Mobile data traffic also saw a significant rise of 25.7%. Gyro, Telkom’s infrastructure arm, made progress on the disposal of the masts and towers business, with the company receiving R204 million from the sale of non-core properties.
While we face challenges, such as high unemployment rates and the need for economic growth to support our connectivity businesses, we are encouraged by positive signs in South Africa, including lowering interest rates and moderating inflation.
Looking ahead, the strength of our balance sheet remains a top priority, ensuring we stand resilient in the face of challenges. We will endeavour to maintain the good momentum we have experienced so far into the second half of the year, which is pointing towards a sustained trend of positive free cash flow.
It is important to emphasise that our focus on efficiency drivers is not solely about reducing workforce numbers, but rather about optimising performance across the board. We are actively reshaping the business construct without compromising our core strengths.
