Telkom resumes dividend payments after a five-year pause, propelled by a striking 62.3% surge in earnings. South Africa’s telecommunications leader has announced a payout of R1.3 billion to shareholders, comprising both an ordinary and a special dividend. This move highlights a dramatic financial recovery for Telkom, fueled by strong performances in its mobile and fibre divisions. After years of navigating economic challenges and competition, the company now demonstrates renewed stability. Shareholders welcome this development as a sign of Telkom’s commitment to delivering value and confidence in its future.
Telkom Resumes Dividend Payments: A Boost for Investors
Telkom has resumed dividend payments, offering a final dividend of 163 cents per share and a special dividend of 98 cents per share. This totals R1.3 billion, a significant shift from the company’s dividend suspension since 2019. The decision stems from a 62.3% rise in headline earnings per share, which climbed to 467.5 cents for continuing operations. Company leaders credit this achievement to streamlined costs and the recent sale of its Swiftnet tower business. For investors, this payout not only rewards patience but also marks Telkom’s return to financial strength. The company’s revised dividend policy now aims to distribute 30-40% of free cash flow, striking a balance between shareholder returns and growth investments.
Earnings Growth Drives Turnaround
Telkom’s earnings leap reflects its focus on high-demand services. The company reported a 3.3% increase in group revenue, reaching R43.8 billion. Mobile service revenue soared by 10.2%, while fibre-related data revenue grew by 10%. Subscriber numbers in the mobile segment jumped 19.5% to 15.2 million, showcasing robust demand. Adjusted EBITDA rose 25.1% to R11.7 billion, with the margin expanding to 26.9%. These gains stem from Telkom’s push into mobile and fibre markets, alongside effective cost management. Yet, challenges remain. Analysts note that sustaining this growth requires tackling economic headwinds and rival competition. Still, Telkom’s stock rose 5.5% after the announcement, signaling market optimism.
Looking forward, Telkom plans to strengthen its role as South Africa’s digital leader. Its “data-centric strategy” prioritizes innovation and infrastructure investment. This earnings surge and dividend resumption position Telkom for a promising chapter, though success depends on consistent execution in a fast-evolving industry.
No Comments