Telkom’s financial results in a nutshell


Telkom released a trading update for the quarter ended 30 June 2023, which revealed a mixed bag with good revenue growth but declining earnings before interest, taxes, depreciation, and amortisation (EBITDA).

Group revenue grew by 3.8% to R10.67 billion, largely driven by growth in new generation technologies, BCX’s IT business growth, and Swiftnet’s portfolio commercialisation.

EBITDA declined by 4.2%, which also means that Telkom’s EBITDA margin contracted by 1.7 percentage points (ppt) to 21.0%.

The lower EBITDA was largely affected by the decline of legacy revenues and higher direct and operating costs.

The benefit of reduced employee costs following the restructuring exercise has been partly negated by the additional spending on diesel to mitigate the impact of load-shedding.

Telkom is installing and upgrading many of its sites to lithium batteries which will improve its mobile and fibre networks’ resilience and reduce diesel consumption.

It has also increased its solar power footprint at key properties and sites to reduce the impact of power outages caused by load-shedding.

Apart from increased costs associated with load-shedding, Telkom also experienced an increase in the provision for bad debts in its consumer unit.

These bad debts caused Telkom Mobile’s EBITDA to decline by R67 million to R1.14 billion, which, in turn, impacted profitability.

Telkom Consumer recorded a 1.8% increase in revenue during the quarter to R6.362 billion. The growth can largely be attributed to the mobile business and fibre offerings.

Telkom CEO Serame Taukobong put on a brave face regarding the results, saying they have started the 2024 financial year with good momentum.

“Group performance was pleasing in the face of load-shedding, muted economic growth, continuing inflationary pressures, and an intensely competitive landscape,” he said.

He said cost savings from their recent labour restructuring process offset the impact of load-shedding as planned.

However, the legacy revenue declines and higher expected credit losses (ECL) provisions weighed down on overall profitability.

Taukobong said Telkom will continue improving its cost base to improve profitability in the medium term.

Serame Taukobong
Telkom CEO Serame Taukobong

Telkom’s financial results in a nutshell

The table below provides an overview of the year-on-year change in Telkom’s performance for the quarter ended 30 June 2023.

MeasureYear-on-year change
Group revenue+3.8%
Group EBITDA-4.2%
EBITDA margin-1.7 ppts
Telkom Consumer+1.8%
Telkom Consumer EBITDA+10.8%
Telkom Consumer EBITDA margin +1.2 ppts
Mobile revenue+5.2%
Mobile EBITDA-5.6%
Mobile EBITDA margin -2.2 ppts
BCX revenue+2.9%
BCX EBITDA margin-5.2 ppts
Openserve revenue-2.7%
Openserve EBITDA-8.84%
Openserve EBITDA margin-1.9 ppts
Swiftnet revenue+1.2%
Swiftnet EBITDA+1.7%
Swiftnet EBITDA margin+0.4 ppts