JSE-listed telecommunications firm Telkom has revealed it incurred R160 million in restructuring costs during the past financial year, as part of its efforts to streamline operations and improve long-term efficiency.
This figure was disclosed in Telkom’s integrated report for the year ended 31 March, following the release of its financial results last month.
Despite the cost of restructuring, the company reported a strong performance from its continuing operations, with solid growth in key financial indicators.
Group earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 25.1% to reach R11.8 billion, while group revenue increased by 3.3%, totalling R43.9 billion for the period.
Adjusted headline earnings per share more than doubled, climbing 102.4% to 583.2c, with adjusted basic earnings per share up 128.9% to 681.7c. Telkom declared a dividend of 261c per share.
The R160 million in restructuring expenses stemmed from voluntary severance and early retirement packages offered to employees within its subsidiaries BCX and Gyro.
The move forms part of Telkom’s broader turnaround strategy to create a leaner, more agile business capable of responding to market changes and digital transformation pressures.
Telkom says the restructuring measures are critical for its long-term sustainability and ability to compete in a rapidly-evolving telecoms and ICT landscape.
This, as the company continues to prioritise efficiency, innovation and digital expansion across its portfolio, as it positions itself for future growth.
In the 2023 financial year, Telkom entered into formal consultation processes with the relevant stakeholders in terms of section 189 of the Labour Relations Act to restructure the group’s operations to ensure its sustainability.
The company explains that in line with the consultation process with labour unions, phase one of the restructuring commenced in February 2023 and impacted all business units and subsidiaries.
It adds that BCX continues to face persistent operational and financial challenges, necessitating further business changes and phase two of the section 189 process.
In the latest results, BCX saw revenue decline by 4.4% to R12.3 billion, in its ongoing strategic transition towards higher-margin services, said Telkom.
The business generated adjusted EBITDA of R1.4 billion before restructuring costs of R157 million, improving by 6.3% compared to FY2024.
According to Telkom, BCX’s performance accelerated in the second half as the 9% EBITDA margin rose to 13.2%, reflecting early gains from the cost transformation programme.
Gyro, which manages the group’s property portfolio for core operational purposes, generated R730 million from the sale of 57 non-core properties.
An additional 30 properties in the conveyancing process are expected to yield R280 million. Telkom noted that the proceeds will support liquidity and strategic reinvestment.
Meanwhile, Telkom’s employee-related expenses for the 2025 financial year amounted to R8.8 billion, up from R7.9 billion in the prior year.
Salaries and wages remained the largest component at R6.95 billion, while post-retirement pension and fund contributions totalled R1.3 billion.
Post-retirement medical aid and telephone rebates accounted for R218 million and R40 million, respectively.
The company also recorded R69 million in share-based compensation and R1.07 billion in other employee benefits.
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