Telstra delivers $2.1b profit, T25 scorecard on track

Telco giant Telstra Group (ASX: TLS) has delivered its full year results for financial year 2023, showing continued financial growth and positive momentum through the first 12 months of its T25 strategy.

The company reported a total income of $23.2 billion and a net profit after tax of $2.1 billion, up 5.4% and 13.1% respectively on the previous corresponding period.

Reported and underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) totalled $7.9 billion and $8 billion, representing increases of 8.4% and 9.6% on the previous year.

The group’s mobile business was cited as being central to its growth and continued to be a strong performer during the period, while the infrastructure, international, consumer and small business fixed line and health business units also grew their earnings.

T25 scorecard

Telstra’s positive progress was reflected in its T25 scorecard, which showed the company was on track to deliver the majority of its growth objectives.

Significant achievements during the period included deals signed with Low Earth Orbit satellite providers OneWeb and Starlink to deliver new and improved services in regional and remote Australia; the start of construction on a new inter-city fibre project to deliver up to 20,000 kilometres of ultra-high capacity, low-latency fibre to supplement Telstra’s existing fibre network; and a 30% reduction in direct and indirect emissions with a view to reaching at least 50% by 2030.

On the right path

Chief executive officer Vicki Brady believes the group is “absolutely on the right path” in delivering the T25 strategy.

“We continue to see the impact of product simplification, digitisation, answering consumer and small business calls in Australia, and bringing our retail stores in-house,” she said.

“Our Strategic Net Promoter Score [to gauge customer loyalty and satisfaction] increased four points during the year and we achieved our strongest reputation result in 15 years… Australians are beginning to see a change in us, driven by improvements in customer experience, continued network leadership and our strength in cyber security.”

Fighting scams

Ms Brady said the group had worked hard during the period to fight scams.

“Telstra continues to lead the industry on stopping scams… our Cleaner Pipes program is now detecting and blocking more than 9 million scam calls and around 20 million scam text messages each month,” she said.

“As a result of these improvements, the number of customer complaints [we received] reduced to a record low in the year and complaints to the industry ombudsman reduced by more than one-third on the prior year… I am proud of our progress but I also know we have more work to do, and we are accelerating to get there faster.”

Critical role

Ms Brady said Telstra would have a critical role to play in Australia’s future as connectivity increasingly drives lifestyle and work patterns.

This includes bringing new and better technology options to regional and remote areas to help close the digital divide and lift digital inclusion rates.

“We are working with customers across industries to help them digitise and unlock productivity gains that flow through to the national economy and to global markets through our international business,” she said.

“We also continue to invest in capabilities and partnerships to grow our offering in areas including artificial intelligence, data analytics, Internet of Things and cyber security… I am optimistic about the potential for growth in these areas beyond the T25 strategy.”

Final dividend

On the back of the year’s strong results, Telstra’s board resolved to pay shareholders a fully-franked final dividend of $0.085 per share, bringing total dividends for the year to $0.17 and representing a 3% increase on the previous corresponding period.

The group’s guidance for the 2024 financial year includes a total income of $22.8 to $24.8 billion; underlying EBITDA of up to $8.4 billion; capital expenditure of up to $3.7 billion; and free cashflow after lease payments of $2.8 billion to $3.2 billion.