Telstra’s Penn hails ‘tipping point’ as telco launches share buyback

Telstra chief executive Andy Penn has declared the telecoms giant has reached a tipping point after a rise in profits allowed it to launch a $1.4 billion share buyback scheme and hold its 16¢ dividend steady.

The nation’s biggest telco on Thursday reported a 3.4 per cent rise in full-year net profit to $1.9 billion – an increase of 4 per cent from last year.

Telstra boss Andy Penn says the latest financial results are a “turning point”.Credit:Eamon Gallagher

Mr Penn said the results were a “turning point” in the financial trajectory of the company.

“We delivered results in line within guidance, and we are seeing the focus and discipline of [cost-cutting program] T22 pay off,” Mr Penn said.

“We set ourselves big ambitions and we have achieved what we said we would deliver. We have done the hard transformational work and built the capabilities to take advantage of the opportunities ahead. Telstra is fundamentally a different organisation,” said Mr Penn.

Telstra’s underlying earnings (before interest, tax, depreciation and amortisation) fell 9.7 per cent to $6.7 billion. That included a $650 million hit from customers shifting to the NBN and $380 million from COVID-19. The results were in line with guidance.

Shareholders will receive a fully franked final dividend of 8 cents, bringing the total dividend to 16 cents per share. The $1.4 billion share buyback scheme has been introduced following the sale of 49 per cent of InfraCo Towers to investors.

“This share buy-back is a clear demonstration of how we are creating additional long-term value for our shareholders,” Mr Penn said.

Telstra said it expects its total income for financial year 2022 to be between $21.6 billion and $23.6 billion. Underlying EBITDA is expected to be between $7 billion and $7.3 billion.

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