Telstra FY24 Earnings Call Highlights

Telstra (ASX: TLS) shares hit six month highs on Thursday after its FY24 results met analyst expectations and a narrowed FY25 guidance fuelled optimism for further growth.

FY24 Earnings Summary

• Revenue up 1% to $22.9bn

• Reported EBITDA down 4.2% to $7.2bn

• Underlying EBITDA up 3.7% to $8.2bn

• Reported NPAT down12.8% to $1.8bn

• Underlying NPAT up 7.5% to $2.3bn

• Total dividend for FY24 up 5.9% to 18 cents per share

• FY25 EBITDA guidance tightened to $8.5-8.7bn (from $8.4-8.7bn)

• T25 strategy is on track including growth targets for underlying EBITDA, EPS and ROIC

The reported results include $518 million of write-downs for its troubled enterprise business, restructuring costs and M&A adjustments.

Earnings Call Highlights

EBITDA growth: "Underlying EBITDA is a key measure, and it grew by almost AUD 300 million or 3.7% to AUD 8.2 billion." – CEO Vicki Brady

Mobile segment: "Mobile services revenue grew by 5.6%, and our mobile business underpinned our overall underlying earnings growth." – CEO Vicki Brady

ARPU growth: "Average revenue per user grew 2.1% on average across the portfolio, driven by price rises, mix and proposition changes earlier in the year." – CFO Michael Ackland

Enterprise underperformance: "Our Enterprise business underperformed. We commenced action during the year to address challenges in our Enterprise business ... We are confident in achieving our $350 million cost reduction ambition by the end of FY25." – CEO Vicki Brady

Enterprise earnings: "Fixed Enterprise... revenue of $3.5 billion in FY24 was down 5%, while EBITDA of $136 million was down 67% ... Data & Connectivity remains impacted by ARPU compression as we renew customers." – CFO Michael Ackland

Strategic investments: "Our intercity fiber network is an investment in Telstra's – in Australia's future growth, connectivity, and digital prosperity ... We remain confident in returns from these investments and continue to expect the first contributions from the intercity fiber network in FY26." – CFO Michael Ackland

Analyst Q&A Highlights

The below topics have all been answered by CEO Vicky Brady and CFO Michael Ackland.

Mobile growth: "Prepaid remains a fantastic business, but growth was lower in the second half due to less migration, a short-term impact from the Optus outage, and the removal of around 50,000 non-tolling customers."

On intercity fibre project: "We are building the right tech and solution for future demand, particularly with AI workloads pushing to the edge."

3G shutdown impact: "It's not really the cost side that, for me, would be top of mind...switching off the 3G network...would be one of the drivers of our reduction in power use in our Scope 1 and Scope 2 emissions reductions."

5G network usage: "We don't report or think about 5G subscribers...we have gone beyond 50%, which was a goal."

On Foxtel: "If it got to the stage where there was an offer for Foxtel at the right level of value then yes, we would be supportive of that with News Corp... But we're not at that stage, very early stage."

Price increases: "We have made announcements and communicated to our customers' pricing changes... We do provide a lot of choice and option for our customers with no lock-in contracts."

Telstra's critical role: "We are the largest investor in digital infrastructure in the country... so the thing we've got to get right is to make sure as a business we can keep investing."

This article was generated with the support of AI and reviewed by an editor.