Telstra’s telecommunications and network offerings distinguish themselves for their utility, backed by the company’s investments in leading networks that deliver exceptional coverage, speed, and latency in Australia. This positions Telstra uniquely in the market, providing resilience and driving sustained growth.
Telstra shares offer stable historical revenue generation, coupled with substantial growth in earnings, underscoring its favourable and resilient financial standing, capable of delivering sustained returns over the coming years. The company’s strategic focus on emerging market opportunities, such as its 5G network rollout, further enhances its potential for improved Telstra share value and continued success in the evolving telecommunications landscape.
Telstra had released its half-year results for the period ending 31 December 2023, wherein its total income increased by 1.2%, and EBITDA grew by 3.8%, driven by the momentum in the mobile business. Underlying EBITDA rose by $121 million, or 3.1%, to $4 billion. This EBITDA growth contributed to an 11.5% increase in Net Profit After Tax, reaching $1 billion. Earnings Per Share (EPS) increased by 12% to 8.4 cents.
The company’s underlying Return on Invested Capital (ROIC) increased to 7.8%, surpassing its cost of capital. Additionally, Telstra reported that its Episode Net Promoter Score (NPS) increased by three points over the past 12 months to 44.
Telstra is one of the consistent Dividend Paying Companies. In light of the continued growth, Telstra resolved to pay a fully franked interim dividend of 9 cents per share, representing a 5.9% increase compared to the previous year.
A recent review of the company’s operations has highlighted several key initiatives. Telstra plans to reduce the cost base of its Telstra Purple tech services business, particularly in the NAS product segment, in alignment with revenue and evolving market dynamics. Additionally, there is a strong focus on streamlining the product portfolio and simplifying customer support. Furthermore, the company’s substantial investments in its 5G network have significantly increased its coverage over the years, currently boasting 87% population coverage. This enhanced network provides a robust platform for increased business and sales activity for the company.
Telstra’s execution of its T22 strategy led to a profound transformation in the company’s operational framework, representing one of the most significant periods of change for any telco company globally. The T25 strategy is designed to significantly enhance customer experience and advance network and technology solutions. This initiative complements Telstra’s improving operational capabilities, supported by increased investments aimed at enhancing services, expanding coverage, and boosting network capabilities. These efforts indicate robust growth in sales activity and notable operational improvements in the future. Telstra has historically maintained substantial financial stability, consistently generating significant revenues with stable and improving earnings, particularly in recent years. The guidance for FY24 and FY25, building on recent earnings growth, suggests a return to pre-COVID EBITDA and NPAT levels, marking a successful financial recovery for the company. Furthermore, Telstra is among dividend stocks having strong dividend strategy, evidenced by historically consistent and improving dividend payments with a current annual yield of 4.95%, is expected to maintain its trajectory of consistency and growth. Improvements in both financial performance and operational structure are anticipated to support this trend, signalling enhanced income-generating opportunities for stakeholders
Telstra ASX acknowledges the growing significance of consumer choices and behaviours and remains committed to executing its T25 strategy over the medium term.. Having reached the halfway mark in executing this strategy, Telstra is building upon achieved milestones and remains focused on delivering positive outcomes for both customers and shareholders alike.