Telstra reports 13% jump in net profit to $2.1 billion for the year ending June 30

Company News

by Glenn Dyer

Telstra (ASX:TLS) announced a significant 13% increase in net profit, amounting to $2.1 billion, for the fiscal year ending on June 30. Shareholders will witness a 3% rise in the full-year payout, reflecting a portion of this improvement.

The rise in earnings surpassed the 5.4% growth in revenue, which reached $23.2 billion for the year, indicating enhanced margins achieved by the telco over the course of the year.

Based on sustained growth throughout the year, Telstra has resolved to offer a fully franked final dividend of 8.5 cents per share, maintaining consistency with the 2022 final dividend. This decision brings the total dividends for the year to 17 cents, marking a 3% increase or half a cent more compared to 2021-22.

Company directors affirmed that the final dividend aligns with Telstra's policy to maximize fully franked dividends and aims to foster growth over time.

Vicki Brady, CEO of Telstra, noted the overall progress of Telstra's T25 strategy, encompassing growth targets for underlying EBITDA and EPS. She highlighted the central role of the mobiles business in driving growth, backed by strong performance. Additionally, earnings growth was observed in the infrastructure, international, Consumer and Small Business (C&SB) fixed line, and health sectors. However, challenges were acknowledged in certain aspects of the Enterprise fixed business.

Brady emphasized the ongoing focus on cost reduction within the context of the external economic environment.

In anticipation of the year 2023-24, Brady expressed Telstra's outlook for continued growth, aiming for a revenue target ranging from $22.8 billion to $24.8 billion, a range quite similar to the $23.2 billion achieved in 2023. Additionally, the company targets an underlying EBITDA between $8.2 billion and $8.4 billion, slightly surpassing the reported $8 billion for 2023, which saw a growth of 9%.

Brady's focus on enhancing customer experience for the fiscal year 2023-24 remains unwavering, with the belief that successful improvement in this aspect will subsequently drive growth ambitions.

Despite challenges posed by high inflation, Brady maintained confidence in achieving a substantial portion of the cost reduction goal by FY25. The commitment to realizing FY25 underlying EBITDA and EPS growth targets remained resolute.

Brady expressed optimism about Telstra's role in shaping Australia's digital future. The company's investments aim to bolster the digital economy, enhance connectivity in regional and remote areas, and generate value for customers, shareholders, and the nation as a whole.

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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