Australia’s Telstra has published its financial results for the six-month period ending 31 December 2020, reporting declines in revenue, EBITDA and net profit, despite which the company claimed its performance in the period had shown it was ‘building momentum towards growth in its underlying business’.
For the first half of its current financial year (which ends 30 June 2021), Telstra reported a total turnover of AUD12.0 (USD9.3 billion), down 10.4% from the AUD13.4 billion it reported in the corresponding period a year earlier. A notable drop was reported in mobile revenue, which declined by 12.0% y-o-y, to AUD4.7 billion, which it attributed to lower hardware sales (down almost AUD500 million in the six-month period) and the impact on international roaming from the COVID-19 pandemic. Meanwhile, fixed line revenue from the operator’s ‘Consumer & Small Business’ (‘C&SB’) operations fell by 7.5% in the first half of its current fiscal year, to AUD2.4 billion, with fixed line revenue from Enterprise customers declining by 6.4% y-o-y to AUD1.8 billion.
In terms of other key financial metrics, Telstra’s reported EBITDA declined by 14.7% on an annualised basis to AUD4.1 billion, while underlying EBITDA fell by 14.2% to AUD3.3 billion; the two biggest factors in the declines, it noted, were the estimated impact from the ‘in-year NBN headwind’ (defined as the net negative recurring EBITDA impact on Telstra’s business) of AUD370 million, and an estimated AUD170 million impact from COVID-19. Meanwhile, Telstra reported a net profit after tax (NPAT) of AUD1.1 billion for the six-month period under review, down from AUD1.2 billion in H1 2019/20.
In the wake of its first half performance, Telstra issued revised financial guidance for FY21, firstly confirming it now expects total turnover for the financial year to be between AUD22.6 billion and AUD23.2 billion, down from an earlier forecast of AUD23.2 billion-AUD25.1billion. It said the main reason for making that change was ‘due to low-margin hardware and other equipment sales’. Further, Telstra also narrowed its guidance for underlying EBITDA to between AUD6.6 billion and AUD6.9 billion from earlier forecast of between AUD6.5 billion and AUD7.0 billion.
In operational terms, Telstra reported a retail mobile subscriber base of 19.03 million as of 31 December 2020, up from 18.8 million six months earlier, with post-paid accesses climbing by 2.2% y-o-y, to 8.56 million. It also confirmed that its 5G network now covers ‘over 50% [of the] population’, while noting that more than 750,000 5G devices were on its network. In the fixed C&SB sector, the telco reported a total of 3.66 million ‘bundles and standalone date’ services in operation, down marginally from 3.71 million at end-June 2020, while standalone voice connections continued on a downward trend, falling to 554,000 at end-2020, from 871,000 a year earlier.