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Telstra's net profit down, lifts dividend

Christine St Anne/Nicholas Grove/Anthony Fensom  |  13 Aug 2015Text size  Decrease  Increase  |  

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Christine St Anne is Morningstar's online editor. Follow her on Twitter @MstarChristine. Nicholas Grove is a Morningstar journalist. Anthony Fensom is a Morningstar contributor. This is a financial news article to be used for non-commercial purposes and is not intended to provide financial advice of any kind.


Companies covered in this report:

Telstra (TLS)

Crown Resorts (CWN)

Tabcorp Holdings (TAH)

Fairfax Media (FXJ)

Goodman Group (GMG)

Mirvac Group (MGR)


Telstra rings up revenue

Telstra Corporation (TLS) dialled up a mixed result for shareholders on Thursday, announcing its first drop in annual net profit for four years but with higher revenues and stronger underlying earnings.

The telecommunications company's total income for fiscal 2015 (excluding finance income) rose by 1.2 per cent to $26.6 billion, but earnings before interest, tax, depreciation and amortisation (EBITDA) fell 3.5 per cent to $10.7 billion, affected by the sale of the CSL Hong Kong mobile business in May 2014.

Underlying total income rose by 2.3 per cent to $26.3 billion, while EBITDA rose 2 per cent to $10.8 billion, consistent with previous guidance, the Melbourne-based company said.

Net profit after tax dropped by 5.8 per cent, reflecting the CSL sale, while earnings per share (EPS) rose 0.3 per cent to 34.5 cents.

Telstra announced an increase in its final dividend to 15.5 cents per share, fully franked, taking its total dividend for fiscal 2015 to 30.5 cents, with the dividend reinvestment plan applying for the final dividend.

Morningstar head of consumer equity research Daniel Mueller said the result met expectations, with no immediate change in his valuation.

"Mobile revenue growth was strong and network applications and services was again a standout, growing revenues at more than 20 per cent. Fixed voice was again weak, but it was pleasing that the rate of decline is slowing," he said.

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