Telstra Group (TLS) H2 2024 earnings summary

Executive summary

• Achieved third consecutive year of underlying growth, with strong momentum in mobile, infrastructure, and international segments, but underperformance in enterprise business led to a strategic reset and cost actions.

• Underlying EBITDA rose 3.7% to $8.2b, while reported EBITDA fell 4.2% to $7.5b due to $715m in one-off impairments and restructuring costs.

• Underlying NPAT increased 7.5% to $2.3b, but reported NPAT declined 12.8% to $1.8b.

• Fully franked final dividend of 9c per share declared, total FY24 dividend up 5.9% to 18c per share, with a payout ratio of 97% of underlying earnings.

• Over $2b returned to shareholders in FY24.

Financial highlights

• Total income grew 1.0% year-over-year to $23.5b; revenue (excl. finance income) up 1.0% to $22.9b.

• Underlying EPS up 5.7% to 18.5c; reported EPS down 15.6% to 14.1c.

• Free cashflow after lease payments up 7.3% to $3.0b.

• Net debt increased by $1.3b to $15.8b, mainly due to spectrum investments.

• Capex was $3.7b, including $1.3b invested in spectrum.

Outlook and guidance

• FY25 underlying EBITDA guidance is $8.5b–$8.7b, with BAU capex $3.2b–$3.4b, strategic investment $0.3b–$0.5b, and free cashflow after lease payments (before strategic investment) $3.0b–$3.4b.

• Focus on cost discipline, targeting $350m in fixed core cost reductions by end of FY25.

• Continued investment in 5G, fibre, and digital infrastructure, aiming for 95% 5G population coverage by end FY25.

• Confident in maximizing fully franked dividends and maintaining strong credit metrics.