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Telstra has bumped up its dividend after reporting a 13 per cent jump in full-year net profit to $2.1 billion, pointing to strong growth in its mobile business, but also headwinds in its enterprise arm.
The nation’s biggest telco announced total income of $23.2 billion for the year, a 5.4 per cent increase on the previous year, with underlying earnings before interest and tax of $7.9 billion, in line with its previous estimates.
It will pay a fully franked final dividend of 8.5 cents per share, bringing total dividends for the year to 17 cents, a 3 per cent increase on the prior corresponding period.
Telstra said its results show positive overall growth despite a decline in its enterprise business.Credit: Oscar Colman
Telstra chief executive officer Vicky Brady said the company’s booming mobile business had powered its results even as it tackled softer conditions for its enterprise division.
The telco was forced to lower prices in renegotiations with many businesses to avoid losing customers. There was also a larger-than-expected fall in calling apps as workers continue to operate from home or in other flexible arrangements.
“Our mobiles business remains central to our growth and continues to perform very strongly,” she said in a statement to the ASX on Thursday morning. The company’s infrastructure, international, consumer and small business fixed line and health businesses were also growing, she added.
Telstra has increased prices on mobile and fixed broadband plans over the year and more hikes are expected. Brady said improving its customer service remained Telstra’s biggest challenge in the new financial year, predicting total income for financial 2024 to land between $22.8 billion to $24.8 billion with underlying earnings of $8.2 billion and $8.4 billion.
To help achieve this, cost cuts remain firmly on her agenda.
“While our cost reduction ambition is being challenged by high inflation, we still expect to achieve the large majority of this by [financial year 2025],” she said. “We remain absolutely committed to delivering our [financial year 2025] underlying EBITDA and EPS growth ambitions.”
In February, Telstra posted a total income of $11.3 billion for the first half of the financial year, driven by growth in the mobile business and revenue from its acquisition of the Pacific region’s largest telco, Digicel Pacific.
At the time, the Telstra boss had not ruled out further price rises on mobile and broadband plans, but said cost-of-living pressures would be top of mind for the company.
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