NBN keeps pressure on Telstra profit

The NBN roll-out continues to weigh on Telstra’s books, with the telco giant cutting its interim payout to shareholders after a 28 per cent dive in first-half profit to $1.2 billion.

Telstra’s revenue for the six months to December 31 fell 1.7 per cent — or $223 million — to $12.59 billion, though there was growth in prepaid mobile services customers.

The company said it was also bracing for the launch of the 5G network in the coming months, which it said would ensure mobile would become the “engine room” of the business.

“While today’s financial results show parts of our business continue to face short-term challenges, there are positive signs particularly with the significant increase in retail postpaid mobile services,” chief executive Andrew Penn said on Thursday.

The company will pay an interim dividend of 8¢ fully franked, down from 11¢ last year.

Approximately 55 per cent of premises are now connected to the NBN with the associated costs expected to weigh on results in the short term.

“This has been a challenging time as we continue to see increasing competition in the mobile market and Telstra feels the unique impact of the transition to the NBN,” Mr Penn said.

The company confirmed its FY19 guidance as outlined in September, with total income expected to be between $26.2 billion and $28.1 billion, and EBITDA excluding restructuring costs between $8.7 billion to 9.4 billion.

Telstra shares had fallen 2.3 per cent to $3.135 by 10.05am, up from a near historic low of $2.62 in June, but down from $3.43 a year ago.

AAP