Telkom is poised to post a dramatic uplift in its headline earnings per share (HEPS) for the financial year ending March 2026, with the JSE‑listed telecoms group forecasting a 45‑55 % jump on the back of tighter cost control, reduced debt servicing and the continued rollout of its data‑centric strategy.
The company projects HEPS from continuing operations to land between 677.9 c and 724.6 c, up from 467.5 c recorded in the 2025 financial year. Meanwhile, basic earnings per share (EPS) from the same core activities are set to climb 20‑30 %, reaching a range of 679.2 c to 735.8 c.
Telkom attributes the surge to “strong underlying operating performance, continued focus on structural cost optimisation and lower finance charges resulting from reduced debt levels”. The debt reduction stems largely from the R6.75 billion sale of its Swiftnet mast and tower portfolio to an Actis‑led consortium, a transaction that concluded in FY2025 and has trimmed interest expenses significantly.
However, the headline boost hides a more nuanced story. FY2025’s HEPS were depressed by R568 million in one‑off charges, notably a R451 million after‑tax loss from derecognising the Telkom retirement fund (equating to 91.9 c per share) and R117 million in restructuring costs (23.8 c per share). Adding those adjustments back, the underlying HEPS improvement narrows to roughly 16‑24 %—still solid, but far from the dazzling 45‑55 % headline figure.
A second base‑effect further muddies the waters. Basic EPS for total operations, which includes both continuing and discontinued segments, is projected to fall 52‑56 %, sliding from 1 528 c in FY2025 to a range of 679.2 c‑735.8 c in FY2026. This reversal is driven by the unwinding of the Swiftnet disposal gain that was booked as a discontinued operation in the prior year.
Telkom earnings outlook: FY2025 vs FY2026
| Metric | FY 2025 (actual) | FY 2026 (forecast) |
|---|---|---|
| HEPS – continuing operations | 467.5 c | 677.9 c‑724.6 c |
| Basic EPS – continuing operations | 679.2 c‑735.8 c* | 679.2 c‑735.8 c |
| Basic EPS – total operations | 1 528 c | 679.2 c‑735.8 c |
| One‑off charges (retirement fund loss) | 91.9 c per share | – |
| One‑off charges (restructuring) | 23.8 c per share | – |
| Debt reduction (Swiftnet sale) | – | R6.75 bn |
*The FY 2025 figure already reflects adjustments for one‑off items.
The table illustrates that while continuing‑operation earnings are set to rise sharply, total‑operation EPS will contract sharply once the Swiftnet gain is removed.
The R6.75 billion Swiftnet disposal not only cuts interest costs but also removes a revenue‑generating asset from the balance sheet. Telkom’s leadership argues that the trade‑off frees capital to accelerate fibre roll‑outs and 5G densification, positioning the group for longer‑term growth in a market where data consumption is expanding at double‑digit rates.
Industry analysts note that the deleveraging effort improves the company’s credit profile, potentially lowering its borrowing costs and giving it more leeway to invest in network upgrades. Yet they caution that the loss of tower income could tighten cash flow in the short term, especially if the fibre expansion timeline slips.
Investors will be watching the June 2, 2026 release of audited results closely. The market’s reaction will hinge on whether Telkom can convincingly separate the underlying operational gains from the accounting‑driven base effects that colour the headline numbers.
If the telecoms giant manages to sustain the cost‑optimisation momentum while delivering on its data‑centric roadmap, the 45‑55 % HEPS uplift could signal a turning point after years of modest growth. Conversely, if the loss of tower revenues hampers cash generation, the steep drop in total‑operation EPS may outweigh the headline cheer.
Telkom’s upcoming earnings release will thus be a litmus test for its restructuring narrative, offering a clearer picture of how the company balances short‑term profitability pressures against its long‑term ambition to become South Africa’s leading digital infrastructure provider.