Telstra today announced that its strategy continues to deliver financial benefits. Results for the six months to 31 December 2011 show growth in revenue, EBITDA and net profit and strong growth in the number of customers. The company also confirmed guidance for fiscal 2012 and announced a 14 cent interim dividend.
“Last year we recorded one of our best years for customer growth. This momentum has continued into the first half of fiscal 2012,” Chief Executive Officer David Thodey said today.
“Our superior networks and competitive offers are being recognised and valued by new and existing customers. We are also seeing improvement in Telstra’s customer service with TIO complaints down 24% over the year, though we still have more work to do,” he said.
The reported results for the six months to December 2011 were:
- Total revenue increased by 1.1% or $136 million to $12,419 million
- EBITDA increased by 3.7% or $170 million to $4,750 million
- Net Profit After Tax increased by 22.9% or $274 million to $1,468 million
- Capex to sales ratio of 13.8%, with accrued capital expenditure of $1,715 million
- Free cash flow of $1,795 million
- Total revenue increased by 1.2%
- EBITDA increased by 4.5%
Telstra continued to attract new customers in the half year, adding:
- 958,000 domestic mobile customers, including 338,000 postpaid handheld and 436,000 mobile broadband customers
- 106,000 fixed broadband customers
- 166,000 T-Box® and T-Hub® services
- 206,000 customers on bundled multi-product plans, with the total bundled base now more than 1.2 million.
Telstra’s domestic mobile business delivered mobile revenue growth of 10.9% in the half to $4,393 million. Targeted offers and simplified processes have also helped to control costs.
In other key product categories, fixed line (PSTN) voice revenues declined by 9.0% to $2,489 million. Retail fixed broadband revenues increased by 5.8% to $835 million. IP access revenues grew by 8.9% to $514 million.
In our strategic growth businesses:
- Network Applications and Services (NAS) revenue grew by 19.4% to $579 million as the company benefited from improved capabilities and major contract wins in the half.
- Telstra International includes our international managed services division (incorporating Reach), CSL New World and our Chinese digital media assets. Overall the portfolio achieved double-digit growth in the half and will be a key driver of growth for Telstra in the future.
- We have now also established our new Digital Media business unit. Within this portfolio, Sensis sales revenue declined by 24.0% in the half to $528 million. First half results were impacted by the upfront costs of implementing the three year digital strategy and an acceleration in the decline of Yellow print revenues as the market evolved more rapidly than expected. Sensis’ first half results were also impacted by the movement of the recognition of the Perth Yellow Pages book into the second half.
Telstra’s simplification programme remains on track to deliver incremental benefits in fiscal 2012 in excess of the $622 million delivered in fiscal 2011 and in the first half of the year achieved benefits of $456 million, driven by improved labour productivity and simplified processes.
National Broadband Network (NBN)
We believe we are close to finalising the NBN transaction. Shareholder approval of the National Broadband Network transaction at the company’s Annual General Meeting in late 2011 was a key milestone. Telstra has now lodged a revised Structural Separation Undertaking for approval by the ACCC. The company is working towards satisfying this last key requirement and implementing its agreements with NBN Co and the Government.
“Our strategy is unchanged. We will continue to focus on improving customer satisfaction, growing customer numbers, simplifying the business and taking advantage of new growth opportunities.” Mr Thodey said.
Telstra has confirmed fiscal 2012 guidance of low single digit revenue and EBITDA growth, with free cashflow of between $4.5 and $5.0 billion. In addition, the company expects capital expenditure to continue to be around 14% of sales. The NBN transaction is not expected to have a material impact on Telstra’s underlying financial results in fiscal 2012.
As announced in October 2011, it is the company’s intention to maintain a 28 cent fully-franked dividend for fiscal 2012 and 2013. This is subject to the Board’s normal approval process for dividend declaration and there being no unexpected material events.
Telstra’s Board has re-affirmed its intention to consider a broader capital management strategy upon implementation of the NBN agreements, following ACCC acceptance of Telstra’s Structural Separation Undertaking.