Telstra profit, dividends up
Telstra has increased its dividend after lifting its full-year profit by more than 14 per cent.
The telco made a net profit of $4.27 billion for the year to June 30, 2014, up 14.3 per cent from $3.74 billion in 2012/13.
It lifted its fully-franked final dividend one cent to 15 cents per share, taking its full-year distribution to 29.5 cents, up from 28 cents in 2013.
It also announced a $1 billion off-market share buy-back to boost shareholder returns.
The result was boosted by a $561 million profit sale of Telstra’s Hong Kong mobile business CSL, which helped lift total earnings 9.5 per cent to $11.1 billion.
Telstra expects low single-digit growth in underlying earnings 2014/15, but warned total earnings were likely to be flat because of the impact of the CSL sale.
“The flat earnings guidance arises because we sold CSL during the year so we lose the benefit next year of the revenue and EBITDA (earnings before interest, taxes, depreciation and amortisation) from that,” the company’s chief financial officer Andy Penn told AAP.
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“Ignoring that, our underlying earnings are growing consistent with the rate that they have been growing.”
Excluding the impact of the of the CSL sale, Mr Penn said Telstra lifted its earnings 4.7 per cent, while income was up 3.5 per cent.
Mobile revenue was up 5.1 per cent to $9.7 billion and the company added 937,000 new mobile customers during the year.
“Whether you look at it at a headline level or whether you look at it at an underlying level, it was a very strong result, and that, of course, enabled us to increase the level of return to our shareholders,” he said.
The telco increased its dividend for the second time this year after keeping it flat since 2006.
Mr Penn said Telstra was continuing to look for ways to grow its business, including its $US270 million ($A292.13 million) acquisition of online video business Ooyala this week.
“We’ve announced a half a billion dollars worth of acquisitions over the last 12 months and we’ve invested $1.2 billion in the mobile network.”
Optus
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Australia’s second-biggest telco, Optus, has suffered a slide in profit and revenues during the first quarter of its financial year.
Optus’s net profit dipped 1.8 per cent to $164 million in the three months to June 30.
The result was dragged down by exceptional items related to the restructure of its workforce, which saw it cut 350 jobs in May.
Stripping out those extra costs, underlying net profit rose 12.3 per cent to $187 million.
However, operating revenues at the telco, which is owned by Singapore’s SingTel, fell 2.8 per cent to $2.06 billion.
Optus said revenue from its mobile business fell by $24 million, or 1.9 per cent.
The fall was driven by a $15 million drop in lower equipment sales and a $9 million hit from the industry-mandated reduction in mobile termination rates.
Mobile service revenue was stable, as Optus increased revenue from data services.
The number of 4G mobile customers rose by 282,000.
The number of mobile postpaid customers who switched from Optus each month improved to 1.4 per cent from 1.5 per cent a year earlier.
And new complaints about Optus to the telecommunications watchdog fell 41 per cent.
Elsewhere, revenues from the Optus Business division fell 3.3 per cent to $367 million amid price wars with the telco’s rivals and falling data revenues.
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