Telstra reports revenue, profit growth as customer numbers climb in H1 2015

12 Feb 2015

On the back of solid subscriber growth Australian fixed line incumbent Telstra reported increases in both total income and net profit for the first half of its 2015 fiscal year (H1 2015).

In the six months ended 31 December 2014 Telstra generated a total income of AUD13.014 billion (USD11.7 billion), representing a year-on-year increase from the AUD12.803 billion recorded in the same period a year earlier. Sales revenue, meanwhile, totalled AUD12.642 billion in H1 2015, up from AUD12.564 billion a year earlier, with turnover from Telstra’s mobile business increasing by 9.6% y-o-y to AUD5.327 billion, while fixed data revenue grew 7.8% to AUD1.175 billion. Declines continued in fixed voice turnover, which fell to AUD1.917 billion (down 6.9% y-o-y) though the operator highlighted the fact that ‘more customers moving onto bundled plans led to the lowest rate of decline in the fixed voice business for five years’. Overall, turnover from Telstra’s fixed line operations declined 1.7% to AUD3.505 billion.

EBTIDA for the six-month period under review stood at AUD5.317 billion, representing an annual increase of 0.5%, with operating income totalling AUD3.328 billion, up from AUD3.276 billion. Profit for the year from continuing and discontinued operations meanwhile was AUD2.118 billion, up 21.7% y-o-y from AUD1.740 billion a year earlier.

On the back of its results Telstra said it was reiterating its previous guidance for the 2015 financial year, saying it expects continued low single-digit income and EBITDA growth to offset the absence of operating revenue and EBITDA from Hong Kong-based CSL, which it sold last year. As a result, and after excluding the AUD561 million profit from the CSL divestment, Telstra’s income and EBITDA guidance for 2015 is broadly flat, while it expects 2015 free cashflow of between AUD4.6 billion and AUD5.1 billion, while capital expenditure are forecast at around 14% of sales.

In operational terms, Telstra saw domestic retail subscriber numbers increase by 366,000 in H1 2015 to reach 16.4 million, with the company reporting 6.7 million 4G devices on its network, comprising 4.9 million handsets, 666,000 tablets, 384,000 dongles and 624,000 Wi-Fi hotspots. Having continued to invest in its mobile infrastructure, Telstra said it had achieved 90% 4G population coverage, with is expecting this to rise to 94% by mid-2015. Fixed retail data customers numbers increased by 87,000 in the six months to 31 December 2014, standing at just over three million at that date, while fixed voice accesses numbered 6.1 million at the end of the reporting period, down from 6.4 million at end-December 2013.

Australia, Telstra (incl. Belong)