Leadership reflections on FY2025
2
I am pleased to report a robust set of financial results reflecting our strategic focus on operational efficiency, prudent capital management and delivering value to our shareholders.
Nonkululeko Dlamini
Group Chief Financial Officer
Despite a challenging competitive landscape and the depreciation of the rand, we exceeded market expectations, reflecting the resilience and adaptability of our business model.
Our consistent focus on strategic execution has translated into strong momentum in our underlying performance, with steady growth across key operational and financial metrics.
We demonstrated exceptional performance in data services, underscoring the success of our investment in digital infrastructure. Our focus on cost containment and operational efficiencies yielded positive results.
We maintained a robust balance sheet underpinned by prudent capital management.
Strategic investments were directed towards areas that enhance our return on invested capital, ensuring sustainable growth and value creation.
Our strong liquidity and robust leverage ratio position us well to navigate uncertainties and invest in growth.
We have strengthened our cash generation, supporting reinvestment in the business and enhancing shareholder returns. We delivered R1.3 billion to shareholders, setting a new roadmap for continued profitable growth.
The disposal of Swiftnet and non-core properties were successfully executed.
We remain committed to a disciplined capital return programme, while continuing to drive sustainable long-term growth.
We are proud to have successfully met or exceeded all key aspects of our medium-term guidance, which is a testament to our disciplined execution and strategic clarity.
| Medium-term guidance FY2023 – FY2025 |
FY2025 Reported total1 |
|
| Revenue growth | Low to mid-single digit | 3.1 % |
|---|---|---|
| EBITDA growth | Low to mid-single digit | 14.8 % |
| Capex to revenue | 12% – 15% | 13.9 % |
| Net debt to EBITDA | 1.5x – 1.9x | 0.6x |
| 1 | Excludes the gain on sale of Swiftnet. |
| 2 | This financial measure is presented to show the adjusted performance of the Group's operations and is internally used by management to assess the performance of the business. Refer to the below for the reconciliation of the reported figures to the pro forma adjusted figures. |
Discontinued operation assessment
It was confirmed that Swiftnet SOC Ltd (Swiftnet), in addition to being classified as held for sale in FY2024, was a separate component of Telkom and represented a separate major line of business. Therefore, it met the discontinued operation classification from 1 April 2024 to 31 January 2025.
Consequently, Swiftnet's operating results (revenue and expenses) were separately disclosed as a single line item in the consolidated statement of profit or loss for the 10-month period from 1 April 2024 to 31 January 2025.
In March 2024, Telkom SA SOC Ltd entered into a sale agreement to dispose of its entire equity share in Swiftnet to the consortium led by Actis LLP and Royal Bafokeng Holdings (TowerCo BidCo). Prior to the transaction, Telkom held 100% of the shares in Swiftnet. Telkom lost its control over Swiftnet after selling 100% of its equity shareholding to TowerCo BidCo on 31 January 2025. The gain on disposal of Swiftnet is recognised in discontinued operation in the statement of profit or loss and other comprehensive income. The Group recognised a gain on disposal of R4 408 million.
On 27 March 2025, TowerCo BidCo paid R6 618 million in cash and R21 million as a non-cash consideration for the purchase of the shares.
Restructuring costs
BCX announced the initiation of the second phase of the section 189 process in August 2024. A total of 438 employees were affected, resulting in restructuring costs of R157 million incurred in FY2025. Gyro incurred a further R3 million in restructuring costs, amounting to a total Group restructuring cost of R160 million.
Settling the Telkom Retirement Fund
During FY2025, the Telkom Retirement Fund (TRF) met the IAS 19 (Employee Benefits) criteria for a full settlement of the defined benefit plan, following an amendment to the TRF rules. The change was approved by the Financial Sector Conduct Authority, effective from 1 July 2024. The amendment of the TRF rules resulted in Telkom having no further obligation to pay contributions to fund any deficit unless it freely enters into a future agreement in writing, thereby creating a future obligation.
Effectively, Telkom derecognised the present value of the defined benefit obligation and plan assets, effective 1 July 2024. The impact is a loss of R618 million recorded in employee expenses. The loss on settlement consists of:
| Extract of the audited condensed consolidated annual financial statements | Pro forma | Pro forma adjustments | Reported | |
| Continuing operations | Pro forma March 2025 Rm |
Restructuring costs Rm |
TRF derecognition loss Rm |
Reported March 2025 Rm |
| Operating expenses | (22 548) | 160 | 618 | (23 326) |
|---|---|---|---|---|
| Employee expenses | (8 035) | 160 | 618 | (8 813) |
| EBITDA1 | 11 792 | 160 | 618 | 11 014 |
| Operating profit | 5 835 | 160 | 618 | 5 057 |
| Profit before taxation | 4 220 | 160 | 618 | 3 442 |
| Taxation | (869) | (43) | (167) | (659) |
| Profit for the year | 3 351 | 117 | 451 | 2 783 |
| BEPS (cents) | 681.7 | 23.8 | 91.9 | 566.0 |
| HEPS (cents) | 583.2 | 23.8 | 91.9 | 467.5 |
We focused on driving growth and resilience through the evolution of the digital landscape. We aimed to diversify our data revenue streams and focused on fibre and mobile data services, enabling us to offer more diversified data opportunities to our customers. This resulted in mobile and fibre data revenues increasing by 11.6% to R23 825 million, constituting 54.3% of Group revenue, up 4.0 ppts from FY2024.
Group revenue increased by 3.3% to R43 880 million, mainly due to the continued focus on our data-led strategy. This was partially offset by a:
We remain focused on driving sustainable growth and operational efficiency.
Over the medium term, we anticipate revenue acceleration in the mid-single-digit range, supported by targeted marketing campaigns, competitive value propositions and strategic network expansion initiatives.
Leveraging our current momentum on cost containment, we are committed to optimising margins, targeting a Group EBITDA margin of between 25% and 27%, underpinned by disciplined cost management and a focus on improving overall performance efficiencies.
Our approach to strategic capital allocation will continue to prioritise investments that enhance value creation while pursuing operational efficiencies and driving sustainability. This will be through ongoing network simplification and energy transformation programmes, with planned capital deployment maintained at 12% to 15% of revenue.
Lastly, we aim to preserve our financial position strength, targeting a net debt to EBITDA ratio of between 0.5x and 1.5x, ensuring flexibility to respond to market opportunities while maintaining financial resilience.
| New medium-term guidance FY2026 – FY2028 |
|
| Revenue growth | Mid-single digit |
|---|---|
| EBITDA margin | 25% – 27% |
| Capex to revenue | 12% – 15% |
| Net debt to EBITDA | 0.5x – 1.5x |
The Board approved a dividend policy with a dividend payout range of 30% to 40% of FCF after considering capex investments.
We remain dedicated to delivering value to our shareholders through disciplined capital allocation, robust financial performance, and a commitment to sustainable growth.
We look forward to building on this momentum in the coming financial year, continuing to navigate the evolving market landscape with agility and strategic foresight.
Nonkululeko Dlamini
Group Chief Financial Officer
