Telstra profit down but investors see hope

Telstra executives continued to assure investors that the decade-long costs of customers migrating to the NBN are almost over, after the carrier's first-half profit slipped by 2.2 per cent.

Telstra reported net profit after tax of $1.1 billion on Thursday, after customers migrating to the National Broadband Network and COVID-19 reduced earnings.

Income dropped by more than 10 per cent to $12 billion, across products from mobile to home and business internet services.

Mobile revenue dropped 12 per cent to $4.71 billion as fewer phones were sold and fewer people used global roaming due to coronavirus restrictions limiting international travel.

Yet chief executive Andy Penn said the path to earnings growth was ahead, since the initial build of the NBN was completed last year.

NBN Co pays Telstra a fee for each customer migrated from the latter's network.

This fell by 36.7 per cent during the first-half to $658 million. Telstra says the extent of the fall shows the NBN migration effects on earnings are almost over.

The carrier claims to lead the consumer and small business NBN market with 46 per cent share, or 3.4 million connections.

This is the second most valuable product category for Telstra, after mobile.

However, income fell 7.5 per cent to $2.42 billion, which was also blamed on NBN migration.

Looking ahead, Telstra said it will take full ownership of all its retail stores across Australia.

The carrier has 60 owned and operated stores. Licensees run 166, while another 104 are run by Vita Group.

Telstra shareholders will receive an interim dividend of eight cents per share, including a special dividend of three cents per share. The payout was the same as at this time last year.

The Telstra board said it expects to pay a final dividend of eight cents per share.

Shares were up 2.84 per cent to $3.26 at 1418 AEDT.

Austrlaian Associated PressBack to Breaking News

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