Australian operator Telstra posted total income of AUD 12 billion for the half-year ended 31 December 2020, which represents a decline of 10.4 percent year-on-year. Net profit also decreased, by 2.2 percent to AUD 1.1 billion. Reported EBITDA plunged 14.7 percent to AUD 4.1 billion, while adjusted EBITDA decreased 11.7 percent to AUD 4 billion.
Telstra’s board resolved to pay an interim dividend of 8 cents per share, returning a total of AUD 950 million to shareholders. The board also said it expected to pay a final dividend of 8 cents per share, bringing the total dividend for FY21 to 16 cents per share.
During the half year ended 31 December, Telstra added more than 80,000 postpaid handheld mobile services, and more than 46,000 unique prepaid handheld users. It also gained more than 163,000 wholesale mobile services across prepaid, postpaid and IoT services.
Telstra also reports that its 5G network has reached more than 50 percent of the Australian population, with coverage in 100 cities and towns across the country. There are around one million 5G mobile devices connected to the Telstra network.
Telstra on track with its T22 transformation strategy
Telstra also reports it is now less than 18 months from completing its T22 transformation, and more than 80 percent of milestones on that strategy are delivered or are on track to be delivered.
"To get the real benefits from all the effort we’ve already made, we need to be bold. I’ve set an aspiration for mid to high single-digit growth in underlying EBITDA in FY22 and AUD 7.5 to AUD 8.5 billion of underlying EBITDA in FY23. I am confident we can deliver this if we remain focused," said Telstra’s CEO Andrew Penn.
During its first half, Telstra’s Consumer & Small Business digital sales increased to account for 40 percent of its transactions, while over 70 percent of service interactions were digital. Telstra Enterprise reduced its number of active products by 45 percent compared to FY18.
Telstra also says it managed to reduce its underlying fixed costs by a further AUD 201 million and increased productivity targets to AUD 450 million in FY21 and from AUD 2.5 billion to AUD 2.7 billion by the end of FY22. Around AUD 2 billion has already been delivered under this programme, the company added.
Telstra revises financial guidance for FY21
Telstra has also issued revised financial guidance for several aspects of FY21 that were first announced at its FY20 results in August 2020. Total income has been lowered, from AUD 23.2-25.1 billion to AUD 22.6-23.2 billion, an AUD 1.2 billion reduction at the mid-point from prior guidance. The large majority of the change was due to low-margin hardware and other equipment sales.
Second-half underlying EBITDA is expected to range between AUD 3.3 billion and AUD 3.6 billion, compared to AUD 3.3 billion in the first half. Flowing this to the full year means the range for underlying EBITDA was narrowed from AUD 6.5-7 billion to AUD 6.6-6.9 billion.
The underlying EBITDA guidance assumes an in-year NBN headwind of AUD 700 million. The estimated Covid-19 impact in FY21 was unchanged at AUD 400 million.
The guidance range for free cashflow after operating lease payments was increased from AUD 2.8-3.3 billion to AUD 3.3-3.7 billion, up AUD 450 million at the mid-point, due to working capital management and the impact of lower hardware revenue.
