* Returns to full-year profit after hefty impairments

* Aims to consider paying dividend at end of current fiscal year

* Shares up 5.5%

JOHANNESBURG, June 18 (Reuters) - Telkom, South Africa's third-biggest telecoms company, reported a return to annual profit on Tuesday and said it might be able to resume dividends next year after cleaning up its balance sheet.

The company, majority owned by the government, posted a pretax profit of 1.95 billion rand ($107 million) for the year ended March 31.

That was below analysts' average estimate of 3.5 billion rand, according to LSEG, but up sharply from a loss of 13.9 billion the year before.

The latest results saw write-offs of property, plant and equipment, and intangible assets fall to about 80 million rand from 13.5 billion rand the year before.

"The headwinds that we faced under impairments are now behind us," Group CEO Serame Taukobong told investors.

Telkom said it would aim to consider paying dividends at the end of its current financial year. In 2020 the company announced the suspension of dividends for three years to conserve cash and also buy much-needed spectrum.

At 1107 GMT, Telkom shares were up 5.5% at 25 rand.

Revising its dividend policy, the board proposed a payout range of 30-40% of free cash flow after taking into account capital expenditure investments. The previous policy had aimed to pay an annual dividend of 60% of headline earnings, with an interim payout of 40% of interim headline earnings.

The company said its priorities remained strengthening its balance sheet by paying down debt and investing to drive growth.

On sources of capital, Chief Financial Officer Nonkululeko Dlamini told investors that Telkom was considering issuing debt and other funding solutions, without elaborating.

Telkom is reorganising itself as an infrastructure company to try to boost growth by consolidating core assets and selling non-core businesses.

It will continue investing in its mobile business, and is also exploring radio access network sharing with other mobile network operators, which will enable it to capture high-traffic activity, it said.

In fibre, it is preparing its business to benefit from more consumers and businesses switching to newer-generation technologies such as 4G and 5G as mobile operators migrate customers from 2G and 3G by a deadline of the end of 2027.

Telkom reported a 1.6% rise in group revenue to 43.2 billion rand, with mobile service revenue up by 6.8% to 19 billion rand, driven by demand for mobile data and fibre services.

($1 = 18.2785 rand) (Reporting by Nqobile Dludla; Editing by Jason Neely and Mark Potter)