South African telecommunications giant Telkom has returned to the dividend table after a four-year hiatus, following a strong performance that saw full-year headline earnings jump by 62.3%. The company, which operates the country’s largest fixed-line network, announced both a final dividend of 163 cents per share and a special dividend of 98 cents, bringing total shareholder returns to 1.3 billion rand (about $73 million).
The earnings and dividend declaration came after Telkom’s results for the financial year ended March 31, 2025, showed headline earnings per share (HEPS) from continuing operations rise sharply to 467.5 cents, up from 288.1 cents in the previous year. This exceeded many analysts’ expectations and marked a significant turnaround for the partially state-owned firm, which has faced mounting pressure in recent years due to intensifying competition, regulatory hurdles, and shifting consumer trends.
“This year’s robust performance and strategic execution allow us to share the fruits of our success with shareholders,” Telkom said in a statement. “We have declared both an ordinary and a special dividend as a sign of our financial strength and operational stability.”
Dividend Suspension and Recovery Strategy
Telkom had suspended dividends in 2020 to preserve cash amid spectrum auctions, planned network expansions, and uncertain macroeconomic conditions. The company initially planned the suspension for three years but extended it further due to persistent market pressures.
Now, with improved profitability and a solid balance sheet, Telkom is rewarding its shareholders—many of whom are institutional and government-linked investors—with their first payout since 2020.
Revenue and Operational Growth
Revenue for the year rose 3.3% to 43.8 billion rand, exceeding the 43.5 billion rand forecast by analysts surveyed by LSEG (London Stock Exchange Group). The revenue growth was largely driven by a 10.2% increase in mobile service revenue and a 10% rise in fibre-related data revenue.
Telkom has continued to strengthen its presence in the competitive fibre-to-the-home (FTTH) and business fibre segments, benefiting from rising demand for high-speed connectivity in urban and semi-urban areas.
Group adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) climbed by 25.1% to 11.7 billion rand, while the EBITDA margin expanded by 4.7 percentage points to 26.9%. This margin improvement reflects the success of the company’s cost-optimisation programmes, which have targeted operational efficiencies and streamlined legacy infrastructure.
Strategic Focus and Market Positioning
Telkom remains a key player in South Africa’s telecoms sector, despite fierce competition from bigger players like MTN, Vodacom, and newer fibre-focused rivals. Its dual investment in mobile expansion and fixed-line fibre networks appears to be paying off, positioning it as a hybrid service provider in both urban and rural markets.
The company continues to explore options to unlock further value from its infrastructure assets, with past talks of asset sales or mergers—including a previously scrapped potential deal with MTN Group—indicating its openness to restructuring if it enhances shareholder value.
Government Ownership and Future Outlook
The South African government, which holds a majority stake in Telkom, is expected to benefit significantly from the resumed dividends. The payout is likely to bolster the state’s revenue stream at a time of budget constraints and calls for improved service delivery.
With consumer demand for data continuing to grow and more businesses investing in digital transformation, Telkom is optimistic about future growth. The company has hinted at further expansion in fibre coverage, enterprise solutions, and 5G mobile rollout, although it faces hurdles related to spectrum access and regulatory uncertainty.
Analysts believe Telkom’s return to dividends signals renewed confidence in its long-term strategy and strengthens its position in the South African stock market as a stable dividend-paying stock in the tech and infrastructure space.
