A few years ago with its rock steady, reliable 28 cents a share annual dividend, Telstra (TLS) was the key market indicator especially at interim and full year reporting time.
With its millions of shareholders from the trio of privatisations, the stock was in most portfolios, large and small. In contrast the big four banks, now the bellwethers, were ranked lower in importance.
How times have changed with their massive cash dividends and high earnings ratios, the big four banks have zoomed past the telco – even if the slide of the past year has brought them back to the field.
But Telstra shares have come to the field as well, the shares down 19% in the past year – just short of the 20% – 30% falls seen for the big four banks. The shares rose 0.6% to $5.40.
Yesterday the telco produced another fair result – one which showed its strengths and weaknesses.
It is a mobile company still being held back by legacy businesses in copper wires and voice.
A flat first half profit of $2.093 million, but a higher dividend, by half a cent to 15.5 cents a share.
Revenue rose 7.6% to $13.68 billion from $12.72 billion in the six months to December 2014.
“Our results have been achieved against increased mobile competition and acceleration in the NBN multi-technology model roll out," CEO Andy Penn said in a statement.
“We are actively working to simplify our business, drive down costs and help our customers experience what technology can do for their lives and businesses."
"Our results have been achieved against increased mobile competition and acceleration in the NBN multi-technology model roll out," he observed in a statement.
"We have continued to innovate and develop products and services to meet changing customer preferences and expectations in our fixed and mobile businesses."
TLS lifts dividend and on track to meet profit guidance
Telstra’s lifted its mobile customer base by 235,000 to 16.9 million at December 2015, thanks to a healthy Christmas sales period but the segment’s profit margins fell slightly to 39%.
Revenue in this area jumped 3.7% to $5.5 billion in the half year.
That rise in mobile revenue offset another fall in fixed lines revenues which slipped 1.5% to $3.6 billion.
Fixed data revenue rose 6.7% to $1.3 billion but voice revenue dropped 7.6%. It also increased its internet subscriber base to 3.3 million – up from 3 million a year earlier. It also has around 329,000 customers on the national broadband network.
Telstra lifted its capital expenditure on network improvements and expansion by 20% to $2.1 billion, mostly on its mobile network.
