Telstra sees revenue increase in FY13 as mobile sector gains offset fixed losses

8 Aug 2013

Australian fixed line incumbent Telstra has released its financial results for the year ended 30 June 2013, posting a 1.9% year-on-year increase in revenue. With the company reporting total sales of AUD25.50 billion (USD26.19 billion) for the financial year, turnover from the mobile services continued to rise, increasing by 6% to AUD9.20 billion, of which the bulk (AUD4.80 billion) was from post-paid mobile customers. Pre-paid handheld accesses accounted for AUD727 million, with mobile broadband revenue rising by 17.5% compared to the previous financial year to AUD1.19 billion. With hardware sales and machine-to-machine turnover also up y-o-y, it was only in the ‘other’ category – which includes revenues from satellite, mobile wholesale and interconnect – that Telstra reported declines, seeing a 3.5% drop against FY13. By contrast, in the fixed line arena total revenues fell by 2.7% y-o-y, with a 5% annual increase in broadband turnover failing to offset a 9.5% decline in revenue from fixed voice services.

EBITDA for the twelve-month period, meanwhile, stood at AUD10.63 billion, representing a 3.9% rise against the previous year, in line with Telstra’s guidance, with net profit for the year under review increasing by 12.9% to AUD3.87 billion. Free cashflow, however, decreased by 3.3% to AUD5.02 billion as a result of adjustments made following the sale of TelstraClear, which raised AUD669 million, only to be offset by a AUD821 million payment for wireless spectrum. Accrued capital expenditures (CAPEX) for FY13 totalled AUD3.8 billion, up from AUD3.6 billion in the previous year, which the operator said reflected the increase in its CAPEX to sales ratio it announced last year to support the acceleration of its LTE network expansion to 66% of population coverage.

Looking to the financial year ahead, Telstra has issued guidance saying that it expects growth to continue in FY14, forecasting low single digit total income and EBITDA growth, with free cashflow between AUD4.6 billion and AUD5.1 billion. CAPEX is expected to be around 15% of sales as the rollout of its 4G network continues.

In operational terms, at the end of June 2013 Telstra’s mobile customer base stood at 15.1 million, representing a 9.1% increase from the 13.8 million it reported a year earlier. With regards to 4G uptake, Telstra noted that by the end of the reporting period it had sold a total of 2.8 million 4G devices, including 1.9 million handsets, 200,000 tablets, 400,000 dongles and 300,000 mobile Wi-Fi devices. In the fixed retail broadband arena Telstra added 173,000 customers to boost its customer base to 2.8 million, and while PSTN lines in service continue to decline – falling by 287,000 in FY13 to 6.5 million – Telstra highlighted the fact that this was a slower decline than the 313,000 lines shed in FY12.

Australia, Telstra (incl. Belong)