This article first appeared on GuruFocus.

Revenue Growth: 3.4% increase year-on-year, driven by data-led propositions.

EBITDA Margin: Improved from 25.3% to 26.4% on a normalized basis.

Free Cash Flow: Positive at ZAR724 million.

Mobile Data Revenue Growth: Double-digit growth of 11%.

Cash Generation from Operations: Increased by 7.9%.

Capital Expenditure: Increased by 12.9%, focused on Fibre and Mobile network.

Headline Earnings Growth: 16.4% year-on-year.

Basic Earnings Per Share Growth: 12.7% increase.

Net Debt-to-EBITDA Ratio: 0.7 times.

Investment Income: ZAR250 million from invested funds.

Operating Cost Growth: 2.2% excluding once-off costs, below inflation rate.

Average Cost of Debt: Reduced to 8.8% from 9.3%.

Cash Balance: ZAR5.6 billion after debt repayment.

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Release Date: November 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Telkom SA SOC Ltd (FRA:TZL1) reported a 3.4% growth in top-line revenue, driven by data-led propositions.

The company achieved 12 consecutive quarters of leading service revenue growth in a competitive market.

Mobile data subscribers now account for over 75% of the total base, contributing significantly to revenue growth.

The company has maintained a strong balance sheet, with a cash balance of ZAR5.6 billion and unutilized facilities of ZAR4.3 billion.

Telkom SA SOC Ltd (FRA:TZL1) has successfully implemented cost optimization programs, resulting in costs growing below the overall inflation rate.

The company faces challenging market conditions, requiring meticulous planning and competitive propositions.

There is a wide range in leverage targets, with net debt-to-EBITDA maintained at 0.7 times, but with a range up to 1.5 times.

Working capital was negative due to various factors, impacting cash flow management.

Competitors have launched competitive price plans in mobile data, posing a challenge to Telkom's market position.

The company anticipates a moderation in mobile EBITDA margins in the second half of the year.

Q: What could be some pressure points that could affect Telkom's EBITDA margin, and why maintain a wide leverage range? A: The EBITDA margin guidance is a combination of all business units hitting their targets. The leverage range is maintained to allow flexibility for growth opportunities and strategic initiatives. (Serame Taukobong, Group CEO; Nonkululeko Dlamini, Group CFO)

Q: What is the secret behind Telkom's mobile outperformance, and how does the company plan to manage free cash flow seasonality? A: The mobile success is driven by a data-led strategy and competitive pricing, particularly in data packages. Free cash flow seasonality is managed by focusing on collections and capital expenditure timing. (Serame Taukobong, Group CEO; Nonkululeko Dlamini, Group CFO)

Q: How is Telkom positioned against competitive mobile data pricing, and what are the expectations for mobile EBITDA margins in H2? A: Telkom has shown resilience against competitive pricing, maintaining strong performance. Mobile EBITDA margins may moderate due to seasonal market activities. (Serame Taukobong, Group CEO)

Q: What are the future opportunities for cost management at Telkom? A: Telkom employs a structured approach to cost management, with each business unit having specific EBITDA targets contributing to the overall group direction. (Serame Taukobong, Group CEO)

Q: Has Telkom seen any impact from competitors' aggressive pricing in the prepaid market, and what is the outlook for CapEx? A: Telkom has not seen significant impacts from competitors' pricing in the prepaid market. CapEx is front-loaded to build capacity, with no significant increase expected in the second half. (Serame Taukobong, Group CEO)

Q: Would Telkom consider acquiring Cell C if it comes to market? A: Telkom is not considering acquiring Cell C due to a lack of synergies and the current market conditions. (Serame Taukobong, Group CEO)

Q: What is the size of handset receivable sales this period? A: Telkom has achieved over ZAR650 million in handset sales for H1, aiming for ZAR800 million to ZAR1 billion annually. (Nonkululeko Dlamini, Group CFO)

Q: How many non-core properties remain on Telkom's balance sheet? A: There are only minor operational disposals left, with no significant properties remaining. (Serame Taukobong, Group CEO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.