South Africa’s Telkom Resumes Dividend Payment After 5 Years Following 62.3% Earnings Increase

South Africa’s Telkom resumes dividend payment after a strong year, bringing good news to its shareholders for the first time in five years. The telecommunications company, which is partly owned by the government, announced a 62.3% surge in full-year earnings for the year ending March 31, 2025. This impressive result marks a big step in Telkom’s ongoing efforts to turn the business around and compete more effectively in South Africa’s tough telecom market.

Telkom resumes dividend payment after suspending it back in 2020. At that time, the company halted payouts to save money for important projects like buying new spectrum and reducing debt. Now, with its finances in better shape, Telkom is able to reward its shareholders again. The company declared a final dividend of 163 cents per share and a special dividend of 98 cents per share, making a total payout of R1.3 billion (about $73 million). This move signals that South Africa’s Telkom dividend payment is back, showing the company’s confidence in its future.

The strong financial performance was driven by several factors. Telkom saw big growth in its mobile and fibre businesses. Mobile service revenue jumped by 10.2%, and the number of mobile subscribers rose by nearly 20% to 15.2 million. The fibre business also did well, with revenue from fibre data up by 10%. Telkom’s infrastructure division, Openserve, stayed ahead in the fibre market, and its business-focused BCX division saw fibre revenue climb by 12.7%.

Another important reason for the earnings boost was the sale of Telkom’s Swiftnet tower business, which brought in a large one-time profit. This deal helped the company’s profit soar by 299% to R7.5 billion, compared to R1.88 billion the previous year. Headline earnings per share jumped 44.8%, while basic earnings per share rose by nearly 300%.

Telkom’s CEO, Serame Taukobong, said the company’s strategy is focused on data and digital services, aiming to make Telkom the “digital backbone” of South Africa. The board has approved a new dividend policy, planning to pay out 30-40% of free cash flow after capital spending, balancing shareholder rewards with the need to keep investing in the business.

The news that Telkom resumes dividend payment was welcomed by investors. The company’s share price rose by 5.5% after the announcement, reflecting optimism about Telkom’s turnaround. However, the stock is still below its 2019 peak, and analysts warn that Telkom must keep growing its mobile and fibre businesses to stay ahead of tough competition from rivals like MTN, Vodacom, and Rain.

Despite the good news, challenges remain. Telkom still faces pressure from declining fixed-line voice services and must deal with economic issues like inflation and power cuts. The company is reorganising to focus more on infrastructure and digital services, selling non-core assets to stay lean and competitive.

Looking forward, South Africa’s Telkom dividend payment is a sign of renewed strength, but the company will need to keep investing and adapting to maintain its momentum. For now, shareholders can celebrate the return of dividends, a clear sign that Telkom’s hard work is paying off.

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