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Telstra full year financial results 2017

Telstra News Financial Results

Posted on August 21, 2017

5 min read

Today we are releasing our financial results for FY17. This is our chance to explain to shareholders and customers how we’ve performed over the year and what we’re doing to help our customers thrive in a connected world.

We have confirmed that we met the guidance we provided to the market, and announced the outcomes of the capital allocation review we commenced in November 2016. Here are six things you should know about our financial results.

1. The numbers

On a reported basis from continuing operations our Total Income increased 4.3 per cent to $28.2 billion, and our Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) increased 2.0 per cent to $10.7 billion, and our basic earnings per share increased 2.8 per cent to 32.5 cents.

On a guidance basis total income increased 4.3 per and EBITDA increased 4.5 per cent to $11.2 billion. Our Free cash flow was $4.3 billion and our Net Profit After Tax (NPAT) from continuing operations increased 1.1 per cent to $3.9 billion.

2. Our FY17 dividend

Shareholders will receive a fully franked final dividend of 15.5 cents per share, bringing the total dividend for the financial year to 31.0 cents per share.

Combined with the $1.5 billion on and off market share buy-backs completed during the year we returned $5.2 billion to shareholders in FY17.

3. Our capital allocation strategy review

In November 2016 we announced that we would review our Capital Allocation Strategy, to look at the future of our balance sheet structure and settings, investment decisions, returns to shareholders including dividends, buy-backs and other forms of returns, and the best way to manage receipts from the nbn.

As a result of this review we will have a new dividend policy, which will commence in FY18, to move us away from a historical practice of paying out almost 100 per cent of profits. We will adopt an ordinary dividend payout ratio of 70 – 90 per cent of underlying earnings and return in the order of 75 per cent of net one off nbn receipts to shareholders over time through fully-franked special dividends.

We are also making changes to our capital management framework and potentially monetise a portion of locked-in recurring nbn receipts.

4. Customer growth

Our highest priority remains improving customer experience and we are pleased that our key customer measure, our Net Promoter Score, recovered strongly in the second half of the year.

We saw continued customer growth, with 218,000 additional retail mobile services (including 169,000 postpaid handheld services) and 132,000 new domestic retail fixed broadband customers.

Our nbn connections increased to 1,176,000, bringing our total market share to 52 per cent (excluding-satellite customers).

Almost 90 per cent of our retail fixed broadband customers are now on a bundle, with 224,000 adds on the back of the popular ‘Best Bundle Ever’ and ‘Hottest Entertainment Bundle’.

5. Our products

In FY17 we are able to offer our customers great services and products including:

  • The Telstra Live Pass™ which lets customers watch every AFL, NRL and National Netball game live, fast and data-free. Live Pass now has 1.45 million subscribers.
  • The Netgear Nighthawk M1, Australia’s fastest mobile hotspot, developed in partnership with Netgear, Qualcomm and Ericsson.
  • Telstra TV®, with 827,000 devices in market and a growing number of apps including Netflix, BigPond Movies, Stan, Foxtel Now and Yupp TV.
  • The Telstra Gateway Frontier™® hybrid modem, designed to get customers connected sooner using our mobile network while we complete a fixed network installation or migration to the nbn network.

6. Our additional up to $3 billion investment

During the year we announced our intention to invest up to an additional $3 billion over the next three years. So far we’ve focused that investment predominantly on our network, investing around $750 million since November.

This means we’ve been able to:

  • Doubled the download speed capability of standard 4G for 89 per cent of the population
  • Prepared for 5G trials early in 2018
  • Rolling out of Cat M1 capability across the 4GX coverage footprint, opening the country for the Internet of Things
  • Commenced the rollout of the next generation optical fibre transmission network.

For more information on these points and the rest of our financial results, please visit Investor Relations.

You can watch a livestream of our results presentation from 9:15AM AEST on Thursday 17 August. You’ll also be able to read our media releases, letter to shareholders, and other material.

Footnotes

[1] Excluding finance income.

[2] This guidance assumed wholesale product price stability and no impairments to investments, and excluded any proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum. The guidance also assumed the nbn rollout was in accordance with the nbn Corporate Plan 2016. Capex to sales guidance excluded externally funded capex. Guidance excluded the Ooyala impairment in FY16 and restructuring costs in FY17.

[3] Underlying earnings is defined as NPAT from continuing operations excluding net one off nbn DA receipts less nbn cost to connect less tax.

[4] “Net one-off NBN receipts” is defined as NBN one off receipts (consisting of PSAA receipts and Infrastructure Ownership receipts) less nbn cost to connect less tax.

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