Telstra profit up, dividend boosted

Telstra has hiked its dividend almost 6 per cent after its halfyear profit surged 11.4 per cent to $964m as it signed up more customers following Optus’s catastrophic national outage last November.

Delivering her third set of financial results as Telstra chief executive, Vicki Brady said the telco’s consumer and small fixed business more than doubled earnings, while its mobile division recorded strong growth.

“Our mobiles business remains central to growth and continues to perform strongly, growing EBITDA (earnings before interest, tax, depreciation and amortisation) almost $300m in the half, driven by more customers, ARPU (average revenue per user) growth and cost discipline,” Ms Brady said.

“Our consumer and smallbusiness fixed business more than doubled EBITDA largely due to productivity, and our infrastructure businesses also grew, reflecting continued strong demand for our assets.”

Overall revenue firmed 1.1 per cent to $11.43bn, while earnings before interest, tax, depreciation and amortisation rose 3.8 per cent to $4.01bn. Earnings per share jumped 12 per cent to 8.4c, slightly below analyst estimates.

Telstra will pay a dividend of 9c, fully franked, on March 28.

Goldman Sachs analysts expected overall EBITDA of $4.05bn versus consensus estimates of $4.04bn. Most analysts had forecast earnings per share of 9c.

A weak spot was Telstra’s Network Applications and Services business, which delivered flat revenue at $1.35bn.

This prompted Ms Brady to trim the upper range of Telstra full year EBITDA guidance.

“NAS is clearly a long way from where we need it to be,” Ms Brady said. “We are undertaking a full review of the products and services we provide within our enterprise business, and particularly our NAS portfolio. Given the performance in our NAS business, we are tightening our FY24 underlying EBITDA guidance range to $8.2bn to $8.3bn. FY24 guidance across other measures is reaffirmed.”