Telstra’s Profits Decline While Share Price Rises
Telstra’s net profit dropped by 12.8 percent to $1.8 billion for FY24, attributed to challenges in its fixed-line enterprise business resulting in a $311 million writedown. Despite this, shares rose today as the company implemented measures to address the declining performance of its fixed-line business, including job cuts and cost reductions, with a goal of saving $350 million by FY25.
While data and connection services decreased by 3.8 percent, its mobile division saw a 5.6 percent revenue increase, adding over 560,000 new customers and expanding its InfraCo asset base by $150 million. Telstra CEO Vicki Brady acknowledged the struggle in the enterprise business and emphasized the need for improvement.
Chief Financial Officer Michael Ackland noted that recovery in the fixed enterprise business will take time. The company also faces potential price increases in postpaid and prepaid services, which could impact mobile performance. Additionally, Telstra may benefit from a potential sale of its 35 percent stake in Foxtel if the right offer comes along.
Despite the challenges, shareholders were comforted by a 5.9 percent increase in the full-year dividend. The markets responded positively to the announcement, with Telstra shares rising 2.7 percent in afternoon trading to $3.98 each.
