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Earnings season wrap-up: 7 February

Nicholas Grove and Christine St Anne  |  07 Feb 2013Text size  Decrease  Increase  |  

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Nicholas Grove is a Morningstar journalist and Christine St Anne is Morningstar's online editor.


Companies covered in this report:

• Telstra (TLS)

• National Australia Bank (NAB)


Telstra's 1H result in line, reaffirms dividend guidance

Telstra (TLS) on Thursday announced an 8.8 per cent rise in profit for the first half of fiscal 2013 to $1.6 billion.

The company declared a half-year dividend of 14 cents a share, fully franked, to be paid on 22 March 2013. The country's biggest telco also reiterated its intention to pay a dividend of 28 cents for the full 2013 financial year.

Morningstar consumer, tech and telcom analyst Michael Wu said the result and dividend were in line with expectations, with most of the company's divisions recording margin improvements.

"Investors have flown to Telstra in search of secure dividends and would have expected nothing less than confirmation of a 28-cent dividend," Wu said.

Total income for the half rose 1.7 per cent to $12.7 billion, while EBITDA (earnings before interest, tax, depreciation and amortisation) rose 5 per cent to around $5 billion, Telstra said.

Excluding cash proceeds from the sale of the TelstraClear business, free cash flow for the half fell 17 per cent due to working capital investments, Telstra said in a statement.

Telstra reiterated that it expects low-single-digit total income and EBITDA growth for the year, with free cash flow of between $4.75 billion and $5.25 billion.

"Our strategy is unchanged and delivering results for customers and shareholders," Telstra chief executive David Thodey said.

"We will continue to focus on improving customer satisfaction, growing customer numbers, simplifying the business and taking advantage of new growth opportunities.

"We are making good progress but there is more to do."

During the six months ended 31 December 2012, Telstra added 607,000 domestic and 321,000 international mobile customers. Mobile revenue for the period rose 4.6 per cent to $4.56 billion.

"Telstra continues to take market share in the high-growth mobile category ... in our view, subscribers remain attracted Telstra's superior network coverage and speed," Morningstar's Wu said.

Thodey said Telstra invested $1.9 billion in capital expenditure during the half, including significant investments in the Australian mobile network.