| Imagery Source: CNBC Africa/ Waldo Swiegers/Bloomberg via Getty Images |
| Information Source: JSE SENS |
| TELKOM CONTINUES POSITIVE MOMENTUM WITH A GOOD START TO FY2026 |
| Group highlights for Continuing Operations1 |
- Group revenue up 1.1% to R10 817 million
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- Group data revenue growth of 7.1%
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- Telkom Consumer’s mobile service revenue growth of 7.8%
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- Openserve’s fibre data revenue up 11.3%
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- Group EBITDA up 6.5% to R2 798 million
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- Ongoing structural cost improvements
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- Group EBITDA margin up 1.4 percentage points (ppts) to 25.9%
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- Strong operational drivers – data-led strategy in action
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- Mobile data subscribers up 27.5% to 17.2 million
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- Homes connected with fibre up 17.5%, with a 51.1% connectivity rate
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- Positive outlook – continued growth and profitability improvement expected from disciplined operational excellence
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| Group Chief Executive Officer Serame Taukobong commented |
| We are pleased to report solid results for the first quarter, building on last year's strong results. Our data-led strategy continues to be the competitive advantage, enabling us to sustain our momentum into FY2026, and the increased contribution by mobile data and fibre-based services to total revenue is consistent with the assumptions supporting our medium-term objectives. |
| Our ongoing focus on operational excellence across our business units, as well as the OneTelkom way of winning, continued to drive sustained performance, and we remain focused on delivering results as we build the backbone of South Africa’s digital future. We are optimising selling channels, continuously improving customer experience on our networks and providing customer-centric value with affordable and flexible offerings to seamlessly connect customers as we digitally transform South Africa. This resulted in improved profitability for the Group with EBITDA growing by a solid 6.5%. I am confident this momentum will continue throughout FY2026. |
| Excellent Telkom results were disappointingly affected by the BCX performance, with BCX revenue declining by 8.3% while its annuity-based revenue remained flat. Aligned with our focus on delivering results, a specialised team is in place to continue with its work to effect a faster BCX turnaround. |
| The continued effective execution of our data-led strategy cushioned Group revenue, which grew by 1.1% y-o-y. As a result: |
- Group data revenue grew by 7.1%
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- Mobile data revenue increased by 9.6%
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- Openserve fibre data revenue grew by 11.3% and
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- BCX fibre-related revenue within Converged Communication improved by 6.8%
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| It is the performance of data revenue that gives us confidence that we are heading in the right direction to achieve our new medium-term guidance of mid-single digit growth. |
| Overall data revenue contribution as a percentage of total Group revenue advanced in line with our data-led strategy and now represents almost 60% of Group revenue. Telkom Consumer’s mobile service revenue increased by 7.8%, gaining value market share as it continued outpacing South African market growth rates. Subscribers demonstrated strong growth, with mobile data users growing an exceptional 27.5% year-on-year and making up 72.1% of total mobile subscribers of 17.2 million. |
| Openserve delivered strong results, driven by 11.3% growth in fibre data revenue, delivering positive top-line growth. The business unit exceeded its targeted 50% fibre connection rate as it connected an additional 107,907 homes yo-y and has now passed 1.4 million homes. BCX continued its focus on higher-margin IT services and saw operational cost benefits, together with gains from its leaner structure. While growth in fibre data revenue continued, it partially offset the effect of accelerated voice declines during the quarter. |
| EBITDA margin expansion enhanced by operational efficiencies |
| The Group EBITDA was strong, increasing by R171 million as a result of revenue growth and effective cost optimisation programmes, resulting in EBITDA margin expansion of 1.4 ppts to 25.9%. Cost optimisation initiatives focused on sustainable costs and optimising operational structures continued to yield results. |
| The gain on property sales of R127 million also contributed to improved profitability, albeit to a lesser extent relative to Q1 FY2025, as expected. Excluding property sales, Group EBITDA margin improved by 1.4 ppts to 24.7%, further highlighting the strength of the underlying operations. |
| Strong financial position |
| Our financial position remains strong following the settlement of R4 750 million interest-bearing debt post-year end, from the R6 618 million proceeds from the Swiftnet disposal concluded in FY2025. R500 million of the Swiftnet proceeds was returned to shareholders as a special dividend on 14 July 2025. The remainder of the proceeds has been retained to maintain financial flexibility for growth opportunities without compromising our resilience. |
| R158 million proceeds were received during the quarter from eight of the 30 non-core property portfolio sales in the prior financial year, further contributing to liquidity. The cash from the remainder of the non-core properties sold for R121 million is expected to be received during the year. |
| Outlook |
| Looking ahead, Telkom Consumer remains focused on growing service revenue through regional expansion and will continue investing in competitive value propositions, targeted campaigns, and strategic network expansion. Openserve's connect-led strategy, clearly evidenced in this quarter's top-line growth, can be expected to accelerate the adoption of fibre-based services while driving sustainability through ongoing network simplification and energy transformation programmes. BCX remains focused on expanding the cloud and software portfolios and driving operational efficiencies, while a specialised team is working to effect a faster turnaround. |
| We are on track with our data-led journey to deliver sustained performance, actively shaping Telkom to improve returns while preserving our core strengths. We remain focused on enhancing the Group's growth trajectory and margin expansion across our portfolio in line with medium-term guidance. |
| For the full document, click the link below. |
| Telkom SA SOC Limited |
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