Highlights:

• Group data revenue up 7.6% to R26.6 billion
• Group revenue up 1.4% to R44.5 billion
• EBITDA margin of 28.1%, a 1.2 percentage point expansion
• Group EBITDA up 5.8% to R12.5 billion
• Free cash flow of R3 068 million, up 10.4%
• Headline earnings per share of 708.5 cents, up 21.5%
• Cost-to-income ratio of 73.0%, an improvement from 75.1%
• Ordinary dividend per share of 270 cents declared, up 65.7%

Telkom SA SOC Limited today published strong financial results for the year ended 31 March 2026, demonstrating a highly resilient performance that validates the group’s transformation strategy and confidently positions it for consistent quality earnings.

The results mark another year of improved profitability, strengthened cash generation and disciplined capital allocation. Group revenue increased by 1.4% to R44 477 million, driven by robust data revenue growth of 7.6%. Data revenue now contributes 59.8% to total group revenue, up from 56.4% in the prior year, underscoring the ongoing structural shift in the revenue mix towards mobile and fibre.

Group EBITDA increased by 5.8% to R12 480 million, with the EBITDA margin expanding by 1.2 percentage points to 28.1%, tracking above the group’s medium-term guidance range of 25% to 27%. The improvement reflects structural cost management initiatives that drove a 1.1% decline in total costs and an improvement in the cost-to-income ratio to 73.0%.

Free cash flow increased by 10.4% to R3 068 million, supported by improved collections, cost efficiencies and disciplined cash management. Headline earnings per share grew by 21.5% to 708.5 cents, while basic earnings per share rose by 5.5% to 719.5 cents. Net debt reduced by 14.7% to R6 366 million, with the net debt to EBITDA ratio slightly reducing to 0.5x.

The group increased its dividend payout ratio range to 40% to 60% of free cash flow, up from the previous 30% to 40%, and the Board declared an ordinary dividend of 270 cents per share, an increase of 65.7% on the prior year.

Telkom Group Chief Executive, Serame Taukobong says the results validate the strategy for Telkom’s transformation as the group positions itself for consistent quality earnings that allow for enhanced shareholder returns.

"We are now in the most demanding phase of the transformation strategy on which we embarked on three years ago. As the backbone of South Africa’s digital future, we have built a unique ecosystem that leverages the strengths of Openserve’s fibre network and Mobile’s consumer reach to drive continued, resilient growth. Combining these value propositions with the power of IT services and solutions in BCX enables us to support small and medium enterprises, and government, with competitive differentiated propositions for future growth," he says.

"Having established the OneTelkom approach and as the backbone for South Africa’s digital future, the next challenge before us is to further increase our efficiencies and improve growth across the board. These two goals are already delivering quality outcomes in the bulk of our business units."

Telkom Consumer had another remarkable year, gaining further market share through the execution of its data-led, pre-paid-driven strategy. The Mobile business surpassed 25 million subscribers and sustained market-leading service revenue growth for the 14th consecutive quarter, in its 15-year anniversary. Mobile service revenue increased by 6.8% to R22 388 million, with pre-paid service revenue growing by a strong 10.3% to R15 387 million. The execution of the regional strategy delivered double-digit revenue growth from non-metro areas, reflecting an increase in the share of acquisitions in under-penetrated regions. Mobile data subscribers grew by 31.1% to almost 20 million, now representing 77.8% of the total subscriber base. Mobile data revenue increased by 10.5% to R17 752 million, driven by mobile data traffic growth of 18.5% to 2 084 petabytes. Fibre revenue increased by 10.3%, supported by 8.7% subscriber growth and average revenue per user expansion.

The Mobile business delivered a 14.0% increase in EBITDA, with the EBITDA margin expanding by 2.3 percentage points to 29.0%. At business unit level, Consumer increased EBITDA by 20.8% to R6 727 million.

Openserve achieved a significant milestone, recording full-year overall revenue growth for the first time in nine financial years, an indication that the transition to fibre services is largely complete. Overall revenue grew by 2.3% to R12 632 million, with fibre-related data revenue rising by 8.1% to R10 106 million. External revenue increased by 10.7%. Enterprise revenue grew by 9.7%, carrier services by 3.6% and broadband revenue by 6.9%. EBITDA increased by 5.6% to R4 230 million, with the EBITDA margin expanding by 1.1 percentage points to 33.5%.

Openserve continued to drive fibre deployment, with homes passed increasing by 11.6% to 1 539 209 and homes connected growing by 17.7% to 817 540. The industry-leading connectivity rate improved by 2.7 percentage points to 53.1%.

BCX maintained margin resilience, relative to the third quarter, through disciplined cost management in a challenging IT market. Total revenue declined by 7.6% to R11 412 million, with the decline driven primarily by the Converged Communications business as the deliberate migration to fibre platforms continued. The overall IT business revenue was stable, with Cybersecurity services revenue growing by 21.1% and IT hardware and software revenue increasing by 5.6%. EBITDA margin was 9.4%, supported by a 5.2% decline in operational expenditure.

Capital expenditure increased by 10.4% to R6 434 million, with capital intensity within guidance at 14.5%. Investment was directed primarily at mobile and fibre infrastructure to enhance competitiveness, improve customer experience and support future growth. Return on invested capital was 11.2% for the year.

The group received R216 million in proceeds from the transfer of 23 properties, with a further seven properties in conveyancing valued at R64 million.

Taukobong says the group's data-led strategy remains the key growth driver as it enters the next phase of value creation.

"Our data-led strategy remains our key growth driver. By allocating capex to projects that enhance returns, we will continue the disciplined execution that is by now the hallmark of our transformation. We will balance growth investment and cost discipline in the coming year. Capex intensity will remain within the 12% to 15% range, primarily funding mobile and fibre to support revenue growth, while cost efficiencies protect margins."

"Consumer will continue to drive mobile service revenue growth, mainly in pre-paid, through improved customer experience and dynamic value propositions. Openserve will focus on overall revenue growth and growth across the broadband, enterprise and carrier segments. Under new leadership, BCX is repositioning itself as a connectivity provider for digital services. This team is committed to contributing positively to our OneTelkom goals."

"Entering the second year of our medium-term guidance, we remain confident that the guidance provided captures our commitment to disciplined execution in an evolving market. Most encouraging is that most of our business units are already delivering quality outcomes."