From Red to Black: How Telkom South Africa Rebounded with a R1.88 Billion Profit

Not long ago, Telkom was staring down the barrel of a staggering R9.97 billion loss. Headlines were grim, analysts were skeptical, and the public, tired of erratic service and load-shedding disruptions, had lost faith. But just a year later, something remarkable happened. Telkom didn’t just recover—it soared back to profitability, clocking a R1.88 billion profit for the 2023/24 financial year.

That’s an R11.85 billion swing. A dramatic pivot that’s raising eyebrows and restoring some of the shine on one of South Africa’s oldest telecom players.

Let’s unpack the surprising turn of events that pulled Telkom back from the brink.

Where Telkom’s journey began

Though it became a formal entity in 1991, Telkom’s story really begins decades earlier when telecommunication services were bundled under the old Department of Posts and Telecommunications. It was a time when rotary phones were still standard and fixed-line infrastructure barely scratched the surface of what South Africans needed.

In 1997, the South African government made a bold move to partially privatize Telkom. A 30% stake went to Thintana Communications—a joint venture between SBC Communications (USA) and Telekom Malaysia. The hope was to bring in global expertise and desperately needed capital.

Telkom later listed on the Johannesburg Stock Exchange in 2003. While the public jumped at the opportunity, government retained a significant stake. Fast forward to today, and the South African government still holds a 40.5% share, with another 10.9% sitting with the Public Investment Corporation (PIC). Together, that’s a controlling stake of 51.4%.

But even with that solid backing, Telkom hit a wall in 2022/23.

The rough patch: A perfect storm of rising costs and shrinking margins

Telkom’s troubles didn’t happen overnight. In 2022/23, it posted a jaw-dropping R9.97 billion loss. That year, it was battered by load-shedding, spiraling third-party costs, and wage increases that pushed staff-related expenses up 6%—at a time when many South Africans were tightening their belts.

Operating expenses soared. Total expenditure hit R57.65 billion, far outstripping the R47.68 billion revenue the company managed to bring in.

It was a costly wake-up call.

The big turnaround: A leaner, smarter Telkom

In 2023/24, Telkom made some hard calls. It trimmed the fat, cut down on wasteful spending, and streamlined its workforce. The company reduced headcount by 15%, which led to a 4% drop in employee expenses. Management salary increases were frozen, and only modest raises were given to unionized staff—starting late in the year.

But cost-cutting alone doesn’t tell the full story. Telkom also tightened its discretionary spending and third-party costs. Depreciation and asset impairments were significantly lower, thanks in part to fewer write-offs and more conservative spending.

In fact, Telkom’s total expenses dropped from R57.65 billion to just R42.14 billion in one year.

Even though revenue fell to R44.01 billion, the margin between income and spending was finally in Telkom’s favor.

The Swiftnet sale: A game-changing deal

A major boost came from the sale of Swiftnet, Telkom’s mast and tower subsidiary. The deal, which brought in an after-tax profit of R4.3 billion, added much-needed firepower to Telkom’s bottom line. Though this was a one-time event, it gave the company breathing room to refocus and strengthen its core operations.

Investors took notice. Telkom shared through the JSE News Service that basic earnings per share were expected to jump between 290% and 300%. Even stripping out the Swiftnet windfall and factoring in pension fund changes, headline earnings per share were still projected to rise by up to 50%.

A look at the numbers

Here’s a snapshot of Telkom’s financials over the last five years:

Telkom is scheduled to release its 2024/25 financials on 10 June 2025. If the current trend holds, we could be witnessing the start of a new era for the company. With a healthier cost base, strategic asset sales behind it, and a renewed operational focus, Telkom may just be finding its rhythm again.

But one thing’s certain: this comeback wasn’t luck. It was the result of tough decisions, disciplined spending, and a clear-eyed look at what needed to change.

Telkom’s swing from a nearly R10 billion loss to a R1.88 billion profit in just one year is nothing short of extraordinary. It shows that even legacy companies with state ownership can reinvent themselves—if they’re willing to evolve.

As South Africa continues grappling with economic challenges, Telkom’s story stands out as a powerful reminder: resilience is real, but it demands hard choices.

{Source: My Broad Band}

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