Telkom reports R1.9 billion jump in full-year profit

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Telkom has reported a big jump of R1.9 billion in full-year profit recording an increase of over 100%. The company released its financial results for the year ended 31 March 2024, attributing the gains to the group’s “data-led strategy.”

In the results, Telkom recorded a 1. 6% rise in group revenue to R43.2 bn, with mobile service revenue up by 6.8% to R19 billion mainly driven by demand for mobile data and fibre services.

Telkom is South Africa’s third biggest telecommunications company and says its short-to-medium term priorities to strengthen its balance sheet by paying down debt and investing in capital expenditure to drive growth has yielded the anticipated results. It posted a full-year profit of R1.9 billion, registering gains in the financial year ended 31 March 2024 despite the country’s challenging economy.

“We did promise that data consumption will drive our growth. We’ve delivered on that. We did promise to prioritize cash narration. I think we’ve delivered on that. We are focusing on opex rationalization. We promised to prioritize Carfax and we continue on that. We spoke about power and energy. We’ve delivered on that. I think both from the industry, and the micro challenges are many but as an organization we think that we are geared,” says Serame Taukobong, Telkom CEO.

The group says its data-led strategy resulted in the growth of its mobile service revenue by 6. 8% to R19 billion, with the company also surpassing 20 million mobile subscribers.

Openserve’s fibre connectivity rate also increased by 48.5%, surpassing 1.2 million homes with fibre.

“What’s key for us is that the long-term investments that Telkom has made and particularly, positioning ourselves and its beginning to yield results because we’ve been investing in the future and preparing ourselves for the high data demand and data growth that we are anticipating and its beginning to yield results. We have not started investing in fibre recently, but have been investing for over 30 years and if one started early this is strategic and we could now focus on our Carfax rollout,” Taukobong explains.

Telkom says it will be able to pay dividends in the near term as it targets the 2024 financial year proposing a dividend payout range of 30-40% of free cash flow.

“The board had taken a decision 3 to 4 years ago to suspend the dividends as the organization was going through turbulent times. In the recent meeting the board took a decision to reconsider the dividend position and restate the dividend policy. We are not declaring dividend in the 2024 financial year. However, we believe 2025, as we go through the current financial year, we would be able to reconsider based on the performance. We will largely look at cashflow in making sure that the performance in the business is strong enough,” says Nonkululeko Dlamini, Telkom CFO.

Telkom’s all share price jumped by 5.4% following the release of the results with the company looking to maintain a strong asset base and balance sheet going into the 2025 financial year.

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