Telstra FY15 result in line

About the author:

Author name:

By Nick Harris

Job title:

Senior Analyst

Date posted:

13 August 2015, 11:45 AM

Sectors Covered:

Telecommunications, Technology

Key points

• Telstra's (TLS) FY15 result was in line with expectations and guidance which was for "broadly flat revenue and EBITDA"
• On guidance basis (normalised for divestments) EBITDA was up 2.0% yoy to A$10.8bn and net income was up 2.3% to A$26.3bn
• EPS were flat at 34.5c despite TLS divesting assets
• TLS declared a final dividend of 15.5 cents (inline with expectations and up 0.5c on the 1H15)

Outlook

• Telstra has guided to "low single digit EBITDA growth" and "mid single digit income growth" in FY16
• We interpret this as ~3.5% EBITDA growth and ~5% NPAT growth which is in-line with our forecasts but around 1.5% below Factset consensus forecasts

Noteworthy items

Telstra remains focused on business simplification i.e. cost reductions

The key comment of interest to us is "growing our business in Asia and internationally is an important priority for the business and we will continue to leverage our core capabilities and look for new opportunities".

We think this is reinforcing the view that future acquisitions are likely to be in the Asian region.

Impact to consensus

Possibly small downgrades to consensus in FY16 ~1.5-2%.

Investment view

We remain comfortable with our Hold recommendation. Our price target and further analysis is available to clients upon logging in.

More information

Morgans clients can access further analysis on Telstra's FY15 result in our full report published later today. If you are interested in finding out more, please contact your nearest Morgans office.

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