Telstra tumbles despite meeting full-year forecasts
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More news: Telco giant Telstra was one of the worst performers on the ASX 200 in morning trade even as its full-year result broadly met market estimates.
Telstra shares were down 2.7% to $4.85 at midday, having advanced 25% over the last 12 months.
UBS analyst Phil Campbell called it an "in line result", with weaker-than-expected mobile subscriptions offset by stronger performances in its fixed enterprise and consumer and small business divisions.
Telstra CEO calls for national infrastructure plan ahead of Economic Reform Roundtable
The news: Telstra CEO Vicki Brady has called for the government to create a national infrastructure plan to boost productivity while opening a presentation to investors following the telco's FY25 earnings report.
Brady said infrastructure is more than data centres, and that the fibre that connects them, which Telstra's InfraCo provides. is essential. She also highlighted a refreshed spectrum strategy, describing it as "perhaps the biggest opportunity to unlock investment in network infrastructure".
Brady made the comments ahead of the Economic Reform Roundtable in Canberra next week.
What they said: "To unlock opportunities from technology, we’ve got to have the right foundation of digital infrastructure," Brady said.
"We need a national digital infrastructure plan for how we will enable Australia’s digital future. It is the critical foundation for how we will realise the opportunities we see for individuals, businesses and the country to be more prosperous and competitive," she said.
"We need the right policy and regulatory settings to make sure we can roll out large-scale digital infrastructure projects more quickly and efficiently. This comes with having a pro-growth mindset in policy and regulation overall."
Telstra's annual profit jumps; $1b buyback announced
The news: Telstra reported net profit after tax of $2.3 billion for the past financial year on Thursday morning, a 1.8% growth as EBITDA rose 4.6% to hit $8.6 billion.
The telco also overnight announced a joint venture with Infosys to help it lean more into AI. The deal will see Telstra divest 75% of its holding in Versent Group to the Indian digital transformation firm.
In addition to a 19 cents-per-share dividend, Telstra also announced a $1 billion stock buyback brokered by Barrenjoey.
The numbers: Revenue in its mobile sector was up 4.7% to $5.26 billion for the year, the largest growth in absolute terms. The largest percentage growth was in its fixed-enterprise unit, which rose 75% to $239 million.
InfraCo, Telstra's data centre infrastructure play, was up 3.1% to $1.81 billion.
Its international business line took the biggest hit, shrinking 12.4% to $678 million.
Telstra issued guidance for the current financial year of EBITDaL (earnings before interest, taxes, depreciation, amortisation and lease expenses) between $8.15 billion and $8.45 billion, up from $8.02 billion this year. It expects to spend between $300 million and $500 million on "strategic investments."
On the costs front, Telstra says it saved $735 million from restructuring, which is largely through reduction of headcount, and $305 million on fixed costs for its core network. "Other" fixed costs, however, rose $245 million.
Telstra's reported profit was up 31% year-on-year, but that jump was due in large part to one-off expenses incurred during the previous financial year.
The buyback is the second Telstra has done in the past year, following a $750 million purchase announced last June.
What they said: "We delivered our fourth consecutive year of underlying growth, reflecting momentum across our business, strong cost control and disciplined capital management," said CEO Vicki Brady.
"Our reported growth this year is stronger than underlying growth because of significant one-off net costs totalling $715 million in the prior year, mostly related to impairments and restructuring associated with the reset of our Telstra Enterprise business."
On the stock buyback, Brady said: “We are focused on continuing to deliver value for our shareholders, including through our core business cash flow, active portfolio and investment management, and disciplined capital management."
“As we consider the best way to deliver these outcomes, we carefully consider the balance between investing in the growth of our business and the potential for additional shareholder returns.
This is in line with the disciplined approach to capital management we highlighted at the launch of our Connected Future 30 strategy.”
The source: ASX announcement
