With Telstra’s CEO Andrew Penn highlighting the ‘extraordinary disruption’ caused by the COVID-19 and bushfire crises, the Australian telco has published its financial results for the year ended 30 June 2020, revealing declines in revenue and net profit.
For the twelve-month period under review Telstra reported revenues (excluding finance income) of AUD23.710 billion (USD16.9 billion), down 6.1% year-on-year, while ‘total income’ fell to AUD26.161 billion, from AUD27.807 billion in FY19. According to Telstra, ‘competitive pressure, legacy product and service declines, and the [National Broadband Network, NBN] rollout continued to negatively impact income’. Mobile remained the company’s biggest revenue generator, accounting for AUD10.084 billion of the total in FY20, down from AUD10.545 billion a year earlier, with the drop attributed to declines in post-paid and pre-paid ARPU and lower hardware sales. Fixed revenue, meanwhile, fell to AUD4.591 billion, from AUD5.223 billion in FY19, impacted by NBN migration and an ongoing voice and legacy services decline. ‘Data & IP’ revenue fell by 13% on an annualised basis to AUD2.052 billion, with the drop ‘reflecting declines in legacy volumes associated with the NBN rollout, and competitive pricing pressures in data access and connectivity’, while turnover from Network Applications and Services (NAS) dropped by 2.8% y-o-y, to AUD3.379 billion.
More positively, Telstra’s reported EBITDA for FY20 was AUD8.905 billion, up from AUD7.984 billion in the previous fiscal year, while the company also noted that it had been able to trim operating expenses, which dropped to AUD16.951 billion, from AUD19.835 billion. However, increased depreciation and amortisation – which was AUD5.338 billion in FY20 versus AUD4.282 billion a year earlier – was a contributory factor in net profit falling to AUD1.839 billion (FY19: AUD2.149 billion).
Looking ahead, Telstra provided guidance for its current financial year, revealing that it expects total income to be between AUD23.3 billion and AUD25.1 billion in FY21, with underlying EBITDA in the range of AUD6.5-AUD7.0 billion. Capital expenditure is, meanwhile, forecast at between AUD2.8 billion and AUD3.2 billion.