Telkom SA SOC Limited, South Africa's digital infrastructure leader, today announced financial results for the six months ended September 30, 2024.

The results demonstrates robust and steady underlying operational performance, delivering sustainable financial returns while positioning the company as the backbone of South Africa's digital future.

The results reflect Telkom's successful execution of its data-led strategy, resulting in group revenue growing by 1.9% to R21.4 billion, primarily driven by exceptional performance in data services. Mobile data revenue increased by 12.7% and fibre data service revenue rose by 15.5%.

The company's adjusted EBITDA, excluding restructuring cost of R160 million and the Telkom Retirement Fund derecognition loss of R618 million, increased by 18.3% to R5.6 billion, with the adjusted EBITDA margin improving to 26.2%, 3.6 percentage points up on the prior period.

The half-year performance has seen a significant strengthening in the balance sheet. Free cash flow turned positive at R768 million, compared to negative R478 million in the previous period. Interest-bearing debt reduced by R885 million and the net debt to adjusted EBITDA ratio improved to 1.3x from 1.8x at year end.

This half-year improvement reflects the company's enhanced operational efficiency and successful monetisation of its digital infrastructure asset base.

“Our continued investment in our extensive fibre network and mobile infrastructure is now delivering the competitive advantage we anticipated, propelling our data-led strategy to ensure future-readiness,” said Serame Taukobong, Group Chief Executive Officer.

The company's infrastructure investments are yielding strong operational results:

• Mobile subscribers exceeded 22.7 million, growing by 24.6% year-on-year.
• Mobile data subscribers increased by 19.6% to 14.6 million and associated data revenues increased by 12.7%.
• Homes passed by Openserve’s fibre infrastructure and connected grew by 11.4% and 18.1%, respectively. We maintained a market-leading 49.7% home connection rate validating our connect-led strategy for efficient growth.
• Maintained IT revenues growth.

“Our improved cash generation and strengthened balance sheet position us well to continue investing for future growth while maintaining financial discipline,” said Nonkululeko Dlamini, Group Chief Financial Officer.

“We continued with smart capital spend of R2.5bn invested in infrastructure, which is at the heart of our strategy. The capital intensity ratio of 11.9% remains efficient and in line with our forecast of 12-15%,” she said.

These investments and results enhance Telkom as the enabler of South Africa’s digital economy, attracting recognition such as being named “Best Mobile Provider in South Africa” by the 2024/25 Ask Afrika Orange Index.

Telkom continues to optimise its asset portfolio, making progress in the disposal of non-core assets while focusing on high-growth areas.

The Competition Tribunal approved the disposal of Swiftnet on September 3, 2024, marking another significant milestone. We still await regulatory approval for the licence transfer.

Telkom aims to maintain the good momentum into the second half of the year, driving sustained growth.