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REPORTING SEASON: Telstra Corporation (TLS)

Brought to you by CommSec

 

Figure 1: Telstra Corporation 12 month chart

 

Australia’s largest telecommunications firm, Telstra reported its half year 2014 result today. The headline numbers were slightly below market expectations even with a 9% rise in Net Profit after Tax (NPAT) to $1.7 billion.

Sales revenue grew by 3.6% to $12.6 billion also missing expectations of $12.9 billion with product revenue down 1.5% over the period to $3,626 million.

Telstra’s fixed line revenue continued to fall; down by 7.3% to $2,059 million.

Telstra lost another 155,000 fixed voice customer to 6.4 million.

TLS’s Foxtel unit gained new customers over the period helped by lower churn rates and bundling.

Bundling also helped lift the success of its Paylite revenues and its international unit was helped by favourable currency movements, adding $108 million to the result.

Telstra management said that the digital transformation of its business is key to growth and confirmed it expects low single digit growth for both total income growth and EBITDA for the full financial year.

The big winner in this result was the unexpected lift in Telstra‘s dividend, the first time investors have received an increase in 8 years to $0.145 a share; up 3.6%.

The sale of Telstra’s Sensis division will boost 2nd half 2014 revenues by approximately $454 million, but the company will also book a $150 million loss from the deal.

 

You can see all of CommSec’s reporting season analysis by clicking here.

Juliana Roadley, Market Analyst,