Telstra crushes it with a 22% rise in profit to $2.1 billion

Telstra CEO, David Thodey (R), chats with the Executive Vice-Premier of China, Li Keqiang (L). Image: AFP PHOTO / POOL / Torsten BLACKWOOD

Telstra has beaten expectations to post a $2.1 billion net profit, a rise of 21.7% for the first half of the financial year.

Total income rose 1.6% to $13 billion. Earnings per share increased 23.4% to 16.9 cents.

The company announced an interim dividend of 15 cents per share, up 0.5 cents. Telstra is also reactivating a Dividend Reinvestment Plan for its 1.4 million shareholders, making it available from the final dividend due in September.

Telstra’s shares were up 1.2% to $6.57 in early trade.

Revenue from Telstra’s mobile business was twice expectations, increasing 9.6% to $5.3 billion. Domestic mobile customers increased by 366,000 to 16.4 million.

In the six months to December, fixed data revenue grew 7.8% and customers moving onto bundled plans led to the lowest rate of decline in the fixed voice business for five years, with a revenue decrease of 6.9%.

Overall, revenue from Telstra’s fixed business fell 1.7% to $3.5 billion.

CEO David Thodey says the results demonstrate Telstra’s strategy of improving customer advocacy, driving value from its core business and building new growth businesses continued to create value for shareholders.

“Our Earnings Per Share growth of 23.4% highlights a continuing increase in returns for shareholders,” he says. “We are delivering strong operating performance having had three consecutive years of earnings growth and increased cash flows from recent divestments.”

Guidance for the financial year remains unchanged.

In 2015 Telstra expects continued low single digit income and earnings growth, broadly flat.

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