Telstra boosts revenues and net profit in latest financial year

14 Aug 2014

Australian fixed line incumbent Telstra has posted increased revenues, EBITDA and net profit in its financial year ended 30 June 2014.

In the twelve month period under review Telstra generated a total income of AUD26.320 billion (USD24.1 billion), representing a 6.1% year-on-year increase from the restated figure of AUD24.776 billion for the previous fiscal year. Sales revenue, meanwhile, totalled AUD25.119 billion in FY 2014, up from AUD24.298 billion a year earlier, with mobile services generating the largest portion of the total, AUD9.688 billion, compared to AUD9.200 billion in FY13. Retail mobile service revenue actually increased by 6.7% y-o-y, as customer numbers increased, with Telstra highlighting an almost 21% rise in turnover from pre-paid subscribers. Revenue in the fixed line sector declined by 0.8% against the previous fiscal year, however, to AUD7.245 billion, though the company did note that it had registered turnover growth in fixed data and increased infrastructure access revenue as a result of its agreements related to the National Broadband Network (NBN). Further, the operator said that it had recorded ‘the lowest rate of decline in [its] fixed voice business for five years’, with revenues declining by 7.5% to AUD4.034 billion. By comparison, turnover from fixed data services rose by 6.3% in FY14, to AUD1.889 billion.

EBITDA in the period under review stood at AUD11.135 billion, up 9.5% from the AUD10.168 billion recorded in FY13, while net profit increased by 14.3% to AUD4.275 billion. Capital expenditures in the twelve months to 30 June 2014 were AUD3.661 billion, down marginally from the AUD3.689 billion spent by the company in the previous year.

In operational terms, Telstra added almost a million mobile subscribers to bring its total to 16.0 million, up from 15.1 million at end-June 2013, with unique pre-paid customer additions rising by 249,000. Meanwhile, having added 109,000 new ‘mobile broadband’ accesses in the twelve-month period, this brought the total to 1.4 million. To drive uptake, the operator said it had continued to invest in its 4G network, which it claims now has four times the geographical coverage area of the LTE networks operated by its rivals. Such network expansion has boosted the penetration of 4G devices, according to Telstra, with 34% of its handheld customers said to be accessing the 4G network, via more than 5.2 million LTE-enabled devices, comprising: 3.8 million handsets, half a million tablets, 400,000 dongles and 550,000 Wi-Fi hotspots. In the fixed line voice arena, retail customer numbers fell by 278,000, with this partially offset by a 46,000 increase in the wholesale sector, and at the end of June 2014 the total stood at 7.531 million, down from 7.763 million. Retail fixed data connections by comparison increased from 2.772 million at end-June 2013, to 2.995 million, with wholesale broadband accesses increasing by 2.6% y-o-y to 789,000.

Commenting on the company’s performance over the year, Telstra CEO David Thodey said: ‘We have a clear strategy that we are focussed on implementing – we have delivered strong financial performance, we continue to take a disciplined approach to portfolio and capital management and we are carefully investing to provide sustainable long term growth.’

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