Telstra has reported a 7.6 per cent drop in first-half profit to $1.14 billion – in line with guidance and expectations – with the cost of the NBN rollout again weighing significantly on the telco’s balance sheet.
Revenue for the six months to December 31 fell by 3.4 per cent to $12.2 billion as the company’s net profit slipped from $1.23 billion a year ago.
Telstra will, however, maintain its interim dividend at a fully franked 8.0 cents, inclusive of a special dividend of 3.0 cents.
It has also reaffirmed its FY20 guidance.
Chief executive Andy Penn said the company was making strong progress on its T22 transformation strategy, with underlying fixed costs dropping by $422 million, or 12.1 per cent over the period.
This brings the total underlying fixed cost reductions to about $1.6 billion since FY16.
“While (the results) reflect the headwinds we continue to face in the migration to the NBN, they also show we are starting to build positive underlying financial momentum,” he said.
In-year NBN headwinds were about $360 million, with the company estimating it has now shouldered 60 per cent of the total NBN impact.
It maintains NBN rollout costs will peak in FY21.
Telstra has also copped a $50 million hit from the summer’s bushfire crisis, including $10 million in assistance packages, with technicians continuing to work across affected communities.
Mr Penn repeated his view that climate change would be the defining challenge of the decade.
“While it is popular to have an opinion on what others should be doing about climate, including government, what I am focused on is what we are doing as a company and personally as an individual,” he said.
Telstra’s retail customer services increased by 159,000 in the half, bringing the total to 18.5 million.
Mobile revenue increased by 0.3 per cent to $5.3 billion with growth in hardware partly offset by postpaid handheld, prepaid handheld and mobile broadband declines.
Telstra shares slipped on Wednesday afternoon amid rumours a draft version of Mr Penn’s results address had been leaked.
The company announced to the ASX on Wednesday evening that might have been the case, with an administration error to blame.
Shares in the company were worth $3.82 before trade on Thursday, up 19 per cent from $3.21 a year ago.
NBN CONTINUES TO WEIGH ON TELSTRA
* Revenue down 3.4pct to $12.2b
* Net profit down 7.6pct to $1.14b
* Interim dividend held at 8.0 cents per share, fully franked, inclusive of a 3.0 cent special dividend.