Trends
Telstra profit slumps 13% because of corporate trouble
Telstra’s struggling fixed-line enterprise business hit the operator’s full-year earnings, with full-year net profit down 12.8 per cent.
Headline
Telstra’s struggling fixed-line enterprise business hit the operator’s full-year earnings, with full-year net profit down 12.8 per cent.
Context
OUR TAKE Telstra’s aggressive price cuts and focus on artificial intelligence have hit its margins hard, dropping them to their lowest point in several years. While its chief executive has high hopes for a shift to Robotaxis and AI-driven projects, it is now putting pressure on the financials. As competition intensifies, Telstra must balance its visionary goals with financial stability to maintain investor confidence. — Iydia Ding, BTW reporter Telstra ‘s struggling fixed-line enterprise business hit the operator’s full-year earnings, with full-year net profit falling 12.8% to $1,193 million. Revenues for the 12 months to June 2024 increased by 1% to $15 billion. The operator recorded a non-cash asset impairment of $199 million related to the previously announced Telstra enterprise relocation. Earnings before interest, taxes, depreciation and amortisation ( EBITDA ) were $4,971 million, down 4.2%. The impairment also included restructuring costs associated with the operator’s May job cuts, which overshadowed solid mobile growth.
Evidence
Pending intelligence enrichment.
Analysis
Despite the drop in profits, the Australian operator raised its annual dividend by 5.9% , based on underlying earnings before interest, tax, depreciation and amortisation (EBITDA) growth after one-off charges. Ongoing cost reductions in the corporate business are expected to help annual underlying EBITDA grow from $8.2 billion last year to $8.5-8.7 billion in the new year. Also read: Telstra rolls out new core restoration for enhanced resiliency Also read: Telstra transforms emissions reporting with sustainable data solution As Data and Connectivity (DAC) and Network Applications and Services (NAS) evolve, Telstra’s business revenues must strike a balance between innovation and financial prudence. The trajectory of the next few quarters will demonstrate its resilience and ability to adapt in a highly competitive market.
Key Points
- Telstra’s struggling fixed-line enterprise business hit the operator’s full-year earnings, with full-year net profit down 12.8%.
- Ongoing cost reductions in the corporate business are expected to help sustain annual underlying EBITDA growth in the new year.
Actions
Pending intelligence enrichment.
