Telstra says its full-year profit has risen 13.1 percent to $2.1 billion (US$1.34 billion) thanks to strong performance from its mobile and consumer businesses, while aspects of its fixed-line enterprise have experienced headwinds.
The company’s total income rose 5.4 percent to $23.2 billion in the 12 months to June 30, with underlying earnings before interest, tax, depreciation and amortisation up 9.6 percent to $8 billion.
Telstra declared a fully-franked final dividend of 8.5 cents per share, bringing total dividends for the year to 17c, a three percent increase from 2021/22.
Chief executive Vicki Brady said Telstra’s T25 strategy, first announced in 2021, was on pace to deliver most of its objectives.
“In a few months’ time, we will hit the halfway point in delivering our strategy, and the response from customers tells me we are absolutely on the right track,” she said.
A survey used to gauge customer satisfaction is on some metrics at historic highs, while customer complaints dropped to a record low, Ms. Brady said.
But chief financial officer Michael Ackland said issues around the NBN and a protracted special undertaking process had led to delays in Telstra’s commercial execution.
“We will continue to take action to ensure we have a sustainable reseller business,” he said.
“However, our ambition of mid-teens margin is unlikely to be met by FY25.”
Telstra’s enterprise calling application business, which sells businesses products made by the likes of Cisco Systems, also underperformed during the year, shaken up by the working-from-home trend wrought by COVID-19.
Ms. Brady announced Telstra was scrapping its plans to sell its fixed-line infrastructure business, which owns assets like data centres, fibre cables and subsea cables.
“We looked extensively at various options—but we’ve absolutely made the decision that the best way to maximise value for Telstra shareholders is to retain the current ownership of InfraCo Fixed, and it puts us in the best position to be able to make sure we’re evolving to meet those customer needs,” she said.
InfraCo has been run as a standalone business for the last few years, but Telstra sees it as a growth opportunity, she said.
The rollout of an express fibre network between five of Australia’s capital cities is underway, and Telstra is seeing strong demand from customers.
“That’s the infrastructure that hasn’t been invested in for a couple of decades in the country, and it is absolutely foundational infrastructure and investment to support the digital future of the country,” Ms. Brady said.
Telstra also has stopped accepting new customers for its retail electricity business and focuses instead on accelerating digitisation and moving consumers and small businesses off legacy systems.
Ms. Brady highlighted that Telstra has signed three partnerships with satellite providers over the past year and a half, including a deal inked last month with Elon Musk’s Starlink to provide voice and broadband service to customers in rural and remote Australia.
“What excites me is that the innovation happening in the satellite space is such a great complement to the mobile services we provide today,” she said.
“We know what Australia is like, it’s a big geography with a small population relative to that, and so the ability to complement mobile coverage with something like some of the developments happening in the LEO (low earth orbit) space today, we’re excited by.”
Ms. Brady added that such deals wouldn’t change Telstra’s commitment to invest in mobile service for regional Australia.
She expressed disappointment that regulators had vetoed Telstra’s spectrum-sharing deal with TPG over competition concerns, which would have improved its coverage in rural Australia.
The two companies announced this week they would not appeal the deal’s rejection to Federal Court, and Telstra is looking at other ways of improving services in remote locations.
EToro market analyst Josh Gilbert said it was an overall successful year for the telco giant, with Ms. Brady doing a “stellar” job implementing the T25 strategy plan since she became CEO on September 1 last year.
“This solid result comes despite inflation driving costs higher, with the price of labour increasing in the full year,” he said.
“It certainly won’t all be one way for Telstra in FY24, largely due to rising costs keeping a cap on margins and increasing competition.
“Nevertheless, today’s results will please shareholders, and the company’s forecast indicates a promising path ahead, with further profit growth on the cards.”
At 12.15 p.m. AEST, Telstra shares were down 1.9 percent to $4.17 on another day of sharp declines for the market.
