Here’s what you need to know about Telstra’s financial results for the first half of FY19.
Meeting our financial guidance
On a reported basis, total income was $13.8 billion, down 4.1 per cent, EBITDA was $4.3 billion, down 16.4 per cent, and NPAT was $1.2 billion, down 27.4 per cent. On a guidance basis1 total income was $13.8 billion and EBITDA (excluding restructuring costs) was $4.7 billion. Telstra today reconfirmed FY19 guidance.
Shareholders will receive a total fully franked interim dividend of 8 cents per share, comprising an interim ordinary dividend of 5 cents per share and an interim special dividend of 3 cents per share, consistent with our capital management framework and dividend policy. The interim dividend will be paid on 29 March 2019.
The results cover the period from 1 July 2018 – 31 December 2018, and show solid performance in customer numbers and share in the face of intense competition, as well as strong delivery against our T22 strategy announced in June 2018.
More customers and services
During the half, we added 239,000 additional retail postpaid mobile services, including 115,000 services on Belong. There was also continued positive momentum in IoT with revenue growth of 35.6 per cent. Revenue from mobile grew 2.4 per cent compared to the first half of FY18.
In the fixed-line market, 64,000 net retail bundle and data services were added during the half, including 22,000 from Belong. We also added 308,000 nbn connections, maintaining Telstra’s nbn market share of 51 per cent (excluding satellite).
Making progress on T22
This was the first half-year financial results announcement for Telstra since starting to implement its new T22 strategy, enabling the business to take advantage of future opportunities, building on the investment in networks and digitisation announced in 2016.
We’re making good progress on our T22 strategy, with customers already experiencing a number of benefits.
Almost half a million Telstra mobile customers are already enjoying the benefits of the Peace of Mind data plans we launched in July. For those customers this has removed one of the biggest pain points–fear of excess data charges.
Small business customers are benefiting from new bundles launched in October and Telstra Platinum for Business, a new prioritised IT and support solution, launched in November 2018. These new solutions provide flexibility for small businesses to scale and choose what is right for them.
This half we reduced the number of active consumer and small business plans to 120, well on the path toward our target of having just 20 plans in market by the end of the financial year.
Significant progress has also been made to reduce costs and we remain on track to meet FY19 targets as part of the T22 goal of achieving $2.5 billion net productivity improvement by 2022.
The growth in Telstra’s mobile business comes as we continue the rollout of our world-leading 5G technology, successfully complete tests in real-world conditions, develop exclusive partnerships with device manufacturers, and put technology in customers’ hands.
5G devices will be available exclusively through Telstra before any other Australian mobile operator when they are released in the first half of calendar year 2019.
CEO Andy Penn said the company remains very positive about Telstra’s prospects for the future.
“Demand for telco products and services continues to grow and telecommunications infrastructure is only going to increase in importance over the next decade,” Mr Penn said.
More information is available on our Investor Relations website.
1. This guidance assumes wholesale product price stability and no impairments to investments or core assets, and excludes any proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum. The guidance also assumes the nbn™ rollout and migration in FY19 is broadly in accordance with the nbn Corporate Plan 2019. The guidance is provided on the basis of AASB15. Capex is measured on an accrued basis and excludes expenditure on spectrum and externally funded capex. Please refer to the guidance versus reported results reconciliation on page 10 of the Half-year results and operations review lodged with the ASX on 14 February 2019. This reconciliation has been reviewed by our auditors.