Telstra Group Ltd will deliver a nearly 6% increase in its dividend following a substantial 11.4% rise in half-year profits, reaching $964 million. This growth comes in the wake of gaining a significant number of new customers after Optus experienced a severe nationwide outage last November.
Vicki Brady, in her third presentation of financial results as the CEO of Telstra, highlighted that the company's consumer and small fixed business sectors saw their earnings more than double, while the mobile division experienced robust growth.
“Our mobiles business remains central to growth and continues to perform strongly, growing EBITDA (earnings before interest, tax, depreciation and amortisation) almost $300 million in the half, driven by more customers, ARPU (average revenue per user) growth and cost discipline,” Brady said.
“Our consumer and small-business fixed business more than doubled EBITDA largely due to productivity, and our infrastructure businesses also grew, reflecting continued strong demand for our assets.”
Telstra will pay a dividend of 9 cents a share, fully franked, on March 28 – a 5.9% increase on the previous corresponding period.
“This is consistent with Telstra’s capital management framework to maximise the fully franked dividend and seek to grow it over time,” Brady said, adding the company was making positive momentum on its T25 strategy, which includes delivering $500 million in cost savings and extending its 5G network to 95% of the population.
“We’re now halfway through T25, which is a huge milestone and I’m very proud of what the team has delivered so far," she said.
"We continue to see the positive impact of product simplification and digitisation on customer experience. We have 93% of consumer and small-business sales on our new digital stack, and overall we have digitised 71% of our key service transactions.
“In the second half of FY24, we will continue to prioritise activities that deliver a better customer experience and invest in the capabilities and infrastructure we need to deliver sustainable growth now and beyond T25.
“We have remained disciplined on reducing our costs, particularly considering the external economic environment. This discipline during the half delivered $64 million core fixed cost out, and cumulatively we’ve delivered $105m since FY22.”
Lacklustre report
eToro market analyst Josh Gilbert called the report lacklustre.
"It was a lacklustre half-year report from Telstra today, with revenue and total income both growing by around 1% and a slightly disappointing outlook for full-year EBITDA.
“The good news is that Vicki Brady’s efficiency mode continues to pay off, with net income climbing by 11% year-over-year. This is a solid achievement for the business, given they’re still being able to invest significantly in digital infrastructure across Australia.
"Cost discipline has been the focus for shareholders in recent years and when executed well, will continue to be applauded by investors.
“Investors would have hoped for a slightly better result on its mobile product income, which missed estimates, following service outages from rival Optus and, therefore, a clear opportunity for Telstra to acquire new customers.
“The market will likely focus on Telstra narrowing its guidance on full-year EBITDA, which has been attributed to its Network Application Services being a long way from where it needs to be. Shares have had a lacklustre start to the year, trailing the broader market – and today’s results won’t light up the ASX today."