State-owned company that swung from a R10 billion loss to a R3.6 billion profit

Telkom’s turnaround efforts are bearing fruit, with the state-owned telecoms giant having swung from a huge loss of R9.97 billion in 2023 to a healthy profit of R3.55 billion in its 2026 financial year.

Over a five-year period, Telkom has also been able to significantly deleverage its balance sheet, going from R11.9 billion of interest-bearing debt in 2022 to nearly half, R6.5 billion, in 2026. 

In addition, in 2026, Telkom now holds more cash than it owes in interest-bearing debt, a notable turnaround from just five years ago.

These improvements can be attributed to the ongoing implementation of Telkom’s turnaround strategy, with the telecoms giant now a different company from what it was just five years ago.

The fruit of these efforts could be seen in Telkom’s results for the 2026 financial year, released on Tuesday, 2 June.

These results showed that Telkom’s revenue from continuing operations grew by a modest 1.36%, while its EBITDA rose by 13.31% to R12.48 billion.

While the group’s profit for the year fell dramatically, by 52.71% to R3.55 billion, this is due to the high base it started from in 2025, when its earnings and profit were positively impacted by the sale of Swiftnet.

In contrast, Telkom’s basic earnings from continuing operations increased by 27.12% to 719.5 cents per share in 2026, pointing to a strong financial performance despite the decline in profit.

Compared to its 2023 financial year, when Telkom reported a basic loss per share of 2,120.2 cents per share, this marks a dramatic turnaround.

Its strong 2026 results have also allowed Telkom to revise and increase its dividend payout to shareholders, with the company declaring a dividend of 270.10 cents per share.

Telkom’s turnaround

While it was stumbling along in 2022 and reported a loss, Telkom’s financial health came under particularly severe pressure in its 2023 financial year.

That year, the company recognised a huge non-cash asset impairment charge of R13.2 billion, written off against the assets of two of its main cash-generating units: Openserve (R7 billion) and Telkom Consumer (R6 billion).

This saw Telkom report a massive R9.97 billion loss for the 2023 financial year.

In 2023, Telkom’s turnaround also came at a cost, with the company spending R1.07 billion on restructuring and severance costs, which impacted 15% of its employees.

However, in the years to follow, Telkom would continue implementing its turnaround strategy, which included significant cost-cutting measures and the sale of major assets.

For example, Telkom has consistently been optimising its mobile roaming costs by focusing on rolling out its own mobile sites and maintaining stringent roaming thresholds.

This has seen its payments to other operators drop from R3.32 billion in 2024 to R2.54 billion in 2026.

This strategy has been coupled with a structural shift from voice to data, with a much larger portion of Telkom’s revenue now coming from data.

Telkom’s data revenue has grown from R20.84 billion in 2022 to R24.72 billion in 2026, while voice revenue has declined from R9.51 billion to R6.67 billion over the same period.

The most notable development in its turnaround was Telkom’s sale of its subsidiary, Swiftnet, to TowerCo BidCo in 2025. 

This disposal allowed the company to record a R4.4 billion gain, which it largely used to deleverage its balance sheet.

Telkom was able to transition from taking on debt to aggressively paying it off. Its total interest-bearing debt increased from R11.9 billion in 2022 to peaking at R14.3 billion in 2023.

It remained largely stable at R14.2 billion in 2024, before falling dramatically to R11.6 billion in 2025 and even further down to R6.5 billion in 2026.

This aggressive deleveraging allowed Telkom to transition to a cash-rich, negative net debt position.

In 2022, the company had net debt of R7.5 billion with R3.2 billion in cash and cash equivalents. In 2026, this has changed to a net debt position of R1.19 billion and R7.7 billion in cash.

Telkom is now reaping the rewards of its turnaround efforts over the past few years, with the company in a far stronger position than it was just five years ago.