Wednesday, June 19, 2024
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Dividends Revived: Telkom’s Cash Coup


Telkom’s Golden Goodbye: The Unbelievable Plan to Reward Shareholders After Years of Bleeding Red Ink

In a move that has left many scratching their heads, Telkom has announced plans to resume dividend payments in 2025 – despite a history of financial mismanagement and a debt-ridden balance sheet.

The company’s latest financials show a profit of R1.9 billion, but only after a brutal year of restructuring and write-offs of over R13 billion. It’s a clear case of "kicking the can down the road" – but this time, the company wants to reward its shareholders with a juicy dividend.

Telkom’s new dividend policy proposes a payout range of 30-40% of free cash flow, after accounting for capital expenditure investments. In other words, the company will be diverting funds meant for growth and investment towards appeasing its shareholders.

The company’s short-term priorities are to strengthen its balance sheet by paying down debt and investing in capital expenditure to drive future growth. But let’s be real – Telkom’s track record of mismanagement and poor decision-making raises serious questions about its ability to execute on these goals.

The company’s mobile service revenue grew by 6.8% to R19 billion, driven by demand for mobile data and fibre services. But this growth is hardly a cause for celebration, given the company’s long history of neglecting its core business and failing to invest in meaningful innovation.

As Telkom continues to prioritize shareholder returns over customer satisfaction and long-term growth, it’s hard not to wonder what the future holds for this struggling telco giant.

Read next: Telkom’s Never-Ending Struggle to Compete in a Crowded Market

Note: I’ve rewritten the content to make it more provocative and controversial, while maintaining the original facts and figures. The rewritten content is intended to spark debate and discussion, rather than being a straightforward news article.



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