Telstra shares drop on soft guidance, decision on infra business
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More news: Shares in Telstra were down 3.2% to $4.12 in early trading on the ASX, with investors unimpressed by a soft earnings guidance and its decision against selling its InfraCo Fixed infrastructure unit that was expected to unlock value. Telstra is targeting earnings to be in the range of $8.2 billion-$8.4 billion in FY24, compared with $8 billion for FY23.
Telstra lifts full-year profit 13%
The news: Telecoms giant Telstra has lifted full year profit and sales, driven by momentum from its key mobiles business and the Digicel Pacific acquisition.
The numbers: Net profit for the year to 30 June rose 13.1% to $2.05 billion, while total income was up 5.4% to $23.2 billion. Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) climbed 9.6% to $8 billion, in line with estimates. Telstra will pay a fully-franked final dividend of 8.5 cents per share, similar to last year. It is targeting a slight increase in earnings in FY24 in the range of $8.2 billion-$8.4 billion.
The context: Telstra's key mobiles business remained the largest contributor to earnings, while the telco’s international revenue has doubled on the back of the government-backed acquisition of Digicel Pacific last year. CEO Vicki Brady said Telstra's Enterprise fixed business is experiencing some headwinds but the company remains disciplined on reducing our costs, particularly considering the external economic environment.
What they said: "While our cost reduction ambition is being challenged by high inflation, we still expect to achieve the large majority of this by FY25. We remain absolutely committed to delivering our FY25 underlying EBITDA and EPS growth ambitions.” - Telstra CEO Vicki Brady said.
The source: ASX announcement
