Telstra Revenue Drops 9.7%, Blames Low Mobile Sales & No International Roaming
Telstra’s revenue fell by 9.7 per cent to $10.98 billion for the first half of FY2021, with the disruption of the NBN and the COVID-19 pandemic hitting the telco where it hurts.
The company’s profit before tax was down 20 per cent to $1.33 billion, while overall net profit after tax dipped just 2.2 per cent to $1.13 billion. Telstra will maintain its interim dividend of 8c despite the noticeable dip in profits.
CEO Andy Penn blamed the profit downturn on a $370 million headwind from NBN and an estimated $170 million loss due to COVID-19.
He also said mobile revenue declined by 12 per cent to $4.7 million due to lower hardware volumes and international roaming declines, which fell to almost nothing when international borders were slammed shut.
Despite the revenue dip, Penn flagged a period of growth for the Aussie telco giant.
“After a decade of disruption following the creation of the NBN, and with its rollout now declared complete, we can clearly see the path to underlying growth ahead of us,” Penn said.
“We responded strongly to the financial headwinds created by the NBN through our T22 strategy. This strategy is transforming Telstra while balancing the needs of our customers, our employees and shareholders. We are now less than 18 months from completing T22.”
Penn added: “Our investment in innovation and technology, digitisation and networks, improving our customer experience and being disciplined in our capital management, mean that at the start of this decade, as Australia digitises its economy, Telstra is in a strong position to grow.
“To ensure our future success, we must recognise this moment for what it is – the time to be bold and seize the opportunities we have been patiently building towards. There is a lot of work ahead of us, but I remain confident we can achieve our financial ambitions including for underlying EBITDA of between $7.5 and $8.5 billion and ROIC of around 8 per cent by FY23.”
During the half, Telstra added more than 80,000 post-paid handheld mobile services with healthy performance across all segments and brands.
It also added more than 46,000 unique prepaid handheld users, and more than 163,000 Wholesale mobile services across prepaid, postpaid and IoT services.
Telstra also used the earnings posting to announce it would soon transition to full ownership of its retail stores, which include 166 stores licensed to individuals and 104 to Vita Group.