One state-owned company making billions in South Africa

Telkom reported solid results for the first half of its 2026 financial year, with strong growth in earnings and profit.

This is despite slightly lacklustre revenue growth, as the telecoms giant focused on cost-cutting and saw a 26.7% jump in mobile data subscribers.

Telkom is one of South Africa’s biggest telecommunications companies and the country’s oldest, having been founded in 1991.

On Tuesday, 18 November, Telkom released its interim results for the six months through September 2025.

The company reported a 3.4% increase in revenue to R22.1 billion, which was primarily driven by a 7.9% jump in mobile service revenue, although this was partially offset by a 4.4% decline in revenue from BCX.

However, Telkom kept a close eye on costs over the period, which saw its total expenses decrease by just over 2% to R16.77 billion and allowed the company to grow its EBITDA by 7.4% to R6.02 billion.

The company’s basic earnings per share from continuing operations increased by 12.7% to 325.7 cents per share, while headline earnings jumped by 16.4% to 305.6 cents per share. Telkom’s profit for the period increased by 12.9% to R1.60 billion.

The company said its strong earnings growth reflect the continued cost optimisation initiatives across the group, with cost increases maintained below inflation.

The strong earnings growth also allowed Telkom’s net debt to EBITDA ratio to decline by 0.6% to 0.7 times. 

This decrease was also the result of Telkom’s settlement of R4.83 billion in interest-bearing debt during the period, which also saw the company’s finance charges decrease by 27.3%.

The telecoms giant also got a boost from the R208 million in proceeds it received from the transfer of 18 non-core properties over the period. 

Telkom said 12 properties worth R71 million remain in the conveyancing process and are expected to transfer by the end of the year. 

“There was no auction for the sale of non-core properties during the period, and we do not expect future property sales to be significant, as they rely on further consolidation and exit of properties,” the company explained.

Telkom’s subsidiaries, Openserve and BCX, reported mixed performances, with BCX proving to be a drag on these interim results.

Openserve grew revenue by 2.7%, with its fibre-related data revenue up by 10.1% and the company recording 1.5 million homes passed.

However, BCX saw its revenue decline by 4.4%, largely due to a decrease in revenue from its Converged Communications business.

Regardless, BCS managed to increase its EBITDA by 5.1%, resulting in a higher margin of 9.9%.

Telkom did not declare an interim dividend for the first half of its 2026 financial year.