Telstra profit tumbles as NBN continues to drain revenue
Telstra’s half-year profit has tumbled 27 per cent as the telco feels the full force of the NBN taking away its wholesale fixed-line customers.
Australia’s biggest telco reported a 4.1 per cent slide in pre-tax revenue to $13.8 billion, interest profit was off 16.4 per cent to $4.3 billion, while the legal measure of net profit after tax dropped to $1.2 billion.
Telstra has further slashed its interim dividend to just 5 cents per share, with an additional 3 cents of special dividend, taking the total to 8 cents.
That is 27 per cent lower than the half-year dividends paid last year, and well down on a peak half-year dividend of 15.5 cents.
Despite this, the company’s chief executive, Andy Penn, said he was, “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,” he said.
“Telstra’s circumstances today are very different from what they were before the NBN.
“We are no longer the national wholesale provider. That part of our business — the revenue and value — is being transferred to the NBN and that is reflected in our income, profit, and dividends.”
Mr Penn said the company was seeking to address the loss in revenue through its “T22 strategy to cut costs”, “digitise the business” and invest in future networks, such as 5G mobile.
More to come.
Elysse Morgan speaks with Telstra CEO Andy Penn one-on-one for The Business, tonight on ABC News Channel at 9:45pm (AEDT).