Telkom expects earnings increase as lower debt and cost cuts boost performance

South African telecoms company Telkom says its earnings for the financial year ended March 2026 are expected to rise sharply, supported by reduced operating costs, lower debt-related expenses, and continued momentum in its data-driven business strategy.

The JSE-listed operator projected headline earnings per share from continuing operations to increase by between 45 per cent and 55 per cent, reaching between 677.9 cents and 724.6 cents, compared to 467.5 cents recorded in the previous financial year.

Basic earnings per share from continuing operations are also expected to increase by 20 per cent to 30 per cent, to between 679.2 cents and 735.8 cents.

Telkom said the improved outlook reflects stronger operating performance, ongoing cost optimisation measures, and lower finance charges following a reduction in debt levels.

The lower debt burden was partly driven by the R6.75 billion sale of its Swiftnet towers and masts business to a consortium led by Actis, a transaction completed during the 2025 financial year.

Prior year charges affected the comparison for Telkom

The company, however, noted that the large projected increase was influenced by one-off costs recorded in the previous year.

According to Telkom, its 2025 headline earnings from continuing operations were weighed down by about R568 million in exceptional charges, including a R451 million after-tax loss related to the derecognition of the Telkom retirement fund and R117 million in restructuring expenses.

Excluding those charges, the company said the underlying growth in headline earnings would be lower, ranging from 16 per cent to 24 per cent.

Telkom also disclosed that basic earnings per share from total operations, including both continuing and discontinued businesses, is expected to fall between 52 per cent and 56 per cent from the previous year.

The decline was linked to gains previously recognised from the disposal of Swiftnet, which had been treated as a discontinued operation in the earlier financial year.

The telecoms company said it will release its audited 2026 financial results on June 2, 2026.

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