TTRAF - Telstra Group Limited (TLGPY) Q2 2024 Earnings Call Transcript
2024-02-15 09:42:03 ET
Telstra Group Limited (TLGPY)
Q2 2024 Earnings Conference Call
February 14, 2024 07:00 PM ET
Company Participants
Vicki Brady - Chief Executive Officer
Michael Ackland - Chief Financial Officer
Nathan Burley - Head of Investor Relations
Brad Whitcomb - Group Executive, Telstra Consumer
Brendon Riley - Chief Executive Officer of Telstra InfraCo
Conference Call Participants
Eric Choi - Barrenjoey
Entcho Raykovski - Evans & Partners
Darren Leung - Macquarie Research
Lucy Huang - UBS
Kane Hannan - Goldman Sachs Group, Inc.
Tom Beadle - Jarden
Roger Samuel - Jefferies
Brian Han - Morningstar
Nicholas Basile - CLSA
Jenny Wiggins - AFR
David Swan - The Age and SMH
Stuart Condie - The Wall Street Journal
Joseph Lam - The Australian
Grahame Lynch - CommsDay
Derek Rose - AAP
Presentation
Vicki Brady
Good morning and welcome to Telstra's Results Announcement for the Half Year Ended 31 December, 2023.
I am joining today from the lands of the Gadigal people. On behalf of Telstra, I acknowledge and pay my respects to the Traditional Custodians of Country throughout Australia, and recognize the continued connection Australia’s First Nation peoples have to land, waters and culture. We pay our respects to Elders past and present.
I will make some brief comments on our key highlights, Michael will then take you through the financials, after which I will summarize our progress against our T25 strategy and areas of focus for the second half of FY2024. We’ll then take questions from analysts, investors and media.
Our results for the half show continued growth in reported and underlying earnings, with positive momentum across many of our key indicators. This momentum is also reflected in the progress we have made in the second year of delivery against our T25 strategy.
Focusing on the key highlights for the half: Total income was up 1.2% and EBITDA increased by 3.8%, driven by momentum from our mobiles business. Underlying EBITDA increased by $121 million, or 3.1%, to $4 billion. EBITDA growth flowed through to a 11.5% increase in net profit after tax to $1 billion. Earnings per share increased 12% to $0.084.
Underlying ROIC increased to 7.8% and above our cost of capital. Our Episode NPS increased by 3 points over the last 12 months to 44. Overall, our T25 strategy is on track, including our growth ambitions in underlying EBITDA, earnings per share and ROIC. On the back of continued growth, the Board resolved to pay a fully franked interim dividend of $0.09 per share, representing a 5.9% increase compared to last year.
The increase in the interim dividend is consistent with our capital management framework to maximize the fully franked dividend and seek to grow it over time. At the same time, we continue to invest in our network and infrastructure to deliver connectivity, reliability and security to our customers. While our overall momentum is good, we have some parts of our business performing well, and others where we see challenges.
Our mobiles business remains central to growth and continues to perform strongly, growing EBITDA almost $300 million in the half driven by more customers, ARPU growth and cost discipline. Our customers are seeing the benefits from our leading mobile network and the continued execution of our T25 strategy.
Our Consumer & Small Business Fixed business more than doubled EBITDA, largely due to productivity. Our Infrastructure businesses also grew, reflecting continued strong demand for our assets. We remain disciplined on reducing our costs, particularly considering the external economic environment, which Michael will cover in more detail.
Within our Enterprise Fixed business, Data and Connectivity is performing as expected, but NAS is clearly a long way from where we need it to be. We have seen negative trends in NAS accelerate, and we have a detailed review of our domestic enterprise business underway. Michael will cover the first half NAS performance in detail, and I will come back and speak to the immediate and significant actions we are taking to address this, which are both cost and revenue based....
Telstra Group Limited (TLGPY) Q2 2024 Earnings Call Transcript