TLS 0.00% $3.56 telstra corporation limited.

NP $3.7B Final Div 11c

  1. 8 Posts.
    TLS Results

    Telstra – on strategy and on target

    28 August 2002

    Telstra today announced that underlying sales revenues grew 1.7 percent to $18.8 billion and underlying earnings before interest and tax (EBIT) rose by five percent to $6.7 billion for the full year ended 30 June 2002.



    Telstra Directors have declared a final ordinary dividend of 11 cents per share fully franked at a 30 percent tax rate bringing the full year dividend to 22 cents per share. This represents a full year dividend payment of $2.8 billion, up 15.8 percent on last year for the company’s 1.9 million shareholders.

    The satisfactory EBIT result was underpinned by continuing restructuring and ongoing focus on process improvement, to deliver good cost control in an environment of modest industry growth in Australia and worldwide.

    Telstra’s Chief Executive Officer, Dr Ziggy Switkowski, said this result, in the current market conditions, was a creditable one and an endorsement of the company’s fully integrated, full service telecommunications strategy and its commitment to ongoing improvements in service levels to its customers.

    “We have delivered - with improved and record levels of services to customers, good cost management, targeted capital expenditure and strong cash flows, while defending market shares in a competitive environment,” he said.

    Telstra’s underlying results are produced to allow a like-for-like comparison over a given period, and these represent the core metrics used to measure performance.

    Strong underlying revenue growth was delivered by mobile services and fixed to mobile services which were both up by 10.3 percent.

    Price rebalancing initiatives have resulted in a 15.8 percent rise in underlying basic access revenue offset by a 9.1 percent decrease in local call revenue, a 7.8 percent decline in national long distance call revenue and a 3.8 percent decline in IDD revenue, as Telstra increased access charges and reduced direct call costs to its customers.

    Despite volume growing, a softer market overall in data and Internet services, pushed underlying revenues down one percent but this market sector showed signs of stabilising in the fourth quarter.

    The demand for new data products and services, like BigPond™, remained strong with revenue up 25 percent. This has been driven largely by Internet and Internet Service Provider revenues with total online subscribers up 32 percent to 1.276 million subscribers, including broadband subscribers up 115 percent to more than 168,000 customers.

    “These growth rates indicate that Telstra remains on-track to meet its target of one million broadband subscribers by the end of 2005 and our investment in the broadband network is running to plan,” Dr Switkowski said.

    Dr Switkowski said Telstra’s statutory results showed a decline in Telstra’s EBIT of 10.7 percent to $6.2 billion, a decline in net profit after minorities of 9.8 percent to $3.7 billion and a decline in total revenue excluding interest, of 9.5 percent to $20.8 billion.

    The decline in these group results is due to a number of one-off items in the previous year including large asset sales and the writeback of the superannuation contribution provision of $725 million.

    Telstra’s underlying free cash flow, excluding the net investment in the Asian ventures in fiscal 2001, increased 35.5 percent to a healthy $3.8 billion, and on a reported basis increased by $3.6 billion.

    “We have excellent cash flow, a strong balance sheet and AA- credit ratings maintaining a stable outlook. Telstra’s credit rating quality ranks amongst the highest in the world in the telecommunications sector,” he said.

    In addition, the full year results show that expenses have been tightly managed as the company continued its track record in cost containment and productivity improvements. Underlying operating expenses and equity accounted losses before depreciation, amortisation and interest, declined by two percent to $9.5 billion.

    Telstra’s core operating capital expenditure (excluding off-shore controlled entities) declined 15 percent to $3.4 billion, reflecting better value from suppliers and a more focused approach to capital allocation.

    Dr Switkowski said that performance across all customer service measures remained high, particularly connections and fault restoration in rural and remote areas.

    “Telstra Country Wide is a successful business serving the needs of all our regional and rural customers and has helped deliver outstanding improvements to regional customers,” he said.

    In addition, Telstra increased its asset base in Asia where its international investments were expected to make substantive contributions in the years ahead. During fiscal 2002 Regional Wireless Company (RWC) – which now owns 100 percent of Hong Kong CSL Ltd - contributed $79 million to EBIT.

    The record date of payment for the final dividend is 20 September, 2002 and the dividend will be paid on Monday, 28 October 2002. Shares begin trading ex-dividend on 16 September, 2002, that is, the date up to which a shareholder can buy shares in order to be eligible for the dividend payment recorded on 20 September, 2002.

    -0-

    Telstra’s statement to the market also included a detailed section explaining the company’s Critical Accounting and Corporate Governance policies. For a detailed financial summary refer to the Financial Highlights located at http://www.telstra.com.au/investor


 
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