Telstra (ASX:TLS) launch a $1.35b on-market share buy-back

Company News

by Melissa Darmawan

Australia’s largest telecom provider Telstra (ASX:TLS) have popped out a dividend despite their 11.6 per cent fall in total income to $23.1 billion for the financial year 2021 in line with analyst’s expectations, after categorizing the year as a “turning point” in its financial outlook.

Total revenue came in at $23.1 billion, down 11.6 per cent from the year before, underlying EBITDA declined by 9.7 per cent at $7.6 billion while net profit after tax increased by 3.4 per cent to $1.9 billion. Earnings per share jumped 2 per cent at 15.6 cents for the financial year.

The 9.7 per cent decline in EBITDA included a $650 million hit from the NBN headwind along with a $380 million fall, from the impact of the Covid-19 pandemic.

The giant telecom surprised investors with revenue growth of 3.7 per cent from their mobile services segment from the first half to the second half of the financial year. For the first half, mobile services contributed 37.0 per cent of income to 41.4 per cent in the second half.

However, over the year it fell 8.1 per cent to $9.3 billion largely due to lower hardware volumes which fell $748 million and international roaming declines, down $200 million.

Prepaid handheld services revenue increased by 4.7 per cent to $809 million as unique users increased by 95,000. Average revenue per user increased 7.0 per cent from $19.46 to $20.83.

Mobile broadband services revenue fell by 4.4 per cent to $612 million largely due to a decline in prepaid, and out of bundle enterprise revenue in FY20. Meanwhile, internet of things services revenue grew by 1.2 per cent to $246 million from increasing carriage and managed services revenue.

The company also reported record subscriber growth for Foxtel with paid streaming subscribers surged 155 per cent to over 2 million.

A fully franked final dividend of 8 cents per share including an ordinary dividend of 5 cents, and a special dividend of 3 cents is set to be paid in September this year.

Along with the results, the telecom giant unveiled an on-market share buy-back of up to $1.35 billion saying it would return up to 50 per cent of net proceeds from its InfraCo Towers transaction to shareholders. The 12-month buy-back is set to start on the 17 September this year.

Shares in Telstra (ASX:TLS) are trading 3 per cent higher at $3.945.

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