ASX 200 drops slightly, Telstra rises, AMP sinks

The S&P/ASX 200 Index (ASX:XJO) fell today. The Telstra Corporation Ltd (ASX:TLS) share price went up and AMP Limited (ASX:AMP) sank.

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The S&P/ASX 200 Index (ASX: XJO) fell by 0.1% today to 6,850 points.

Here are some of the highlights from the ASX:

Telstra Corporation Ltd (ASX: TLS)

The Telstra share price went up around 3% after reporting its FY21 half-year result.

Telstra reported that its total income fell 10.4% to $12 billion. On a reported basis, earnings before interest, tax, depreciation and amortisation (EBITDA) fell 14.7% to $4.1 billion and adjusted for lease accounting, EBITDA declined 11.7% to $4 billion.

Looking at underlying EBITDA, it decreased by 14.2% to $3.3 billion. Telstra explained that the largest two contributors to this decline were the estimated impact from the in-year NBN headwind of $370 million and an estimated $170 million impact from COVID-19. Excluding both of these, Telstra said that underlying EBITDA was broadly flat compared to the first half of FY20.

One area that Telstra continues to see growth with is its mobile division. During the half, Telstra added more than 80,000 postpaid handheld mobile services with “healthy performance” across all segments and brands. It also added more than 46,000 unique prepaid handheld users and more than 163,000 wholesale mobile services.

However, Telstra said that mobile revenue declined due to lower hardware sales and the impact of international roaming from COVID-19.

The Telstra board declared an interim dividend of 8 cents per share and expect the annual dividend to be 16 cents per share.

Telstra now expects full year income for FY21 to be in the range of $22.6 billion to $23.2 billion and underlying EBITDA in the range of $6.6 billion to $6.9 billion.

Magellan Financial Group Ltd (ASX: MFG)

Magellan revealed its FY21 half-year result. It said that average funds under management (FUM) went up 9% to $100.9 billion, with management and service fees revenue up 8% to $311.4 million. Profit before tax and performance fees of the funds management business went up 8% to $256.2 million.

Net profit after tax grew 3% to $202.3 million, whilst adjusted net profit after tax fell 2% to $213.1 million.

Magellan said that it expects the funds management business expenses in FY21 to be at the lower end of the $110 million to $115 million range.

The ASX 200 dividend share gave an insight into how its investments in Barrenjoey and Guzman y Gomez are going. Guzman y Gomez has $410 million of annualised global sales, with $387 million of annualised Australian sales. Australian like for like sales growth was 27% in FY21 to date. Barrenjoey has welcomed David Gonski as the independent chair. The Barrenjoey advisory business has been operating since late 2020. The markets businesses are due to go live progressively from the second quarter of 2021.

For the first half of FY21, Magellan decided to increase the interim dividend by 5% to 97.1 cents per share.

AMP Limited (ASX: AMP)

The diversified financial business reported its FY20 result to investors today.

AMP advised that Ares does not intend to proceed with its takeover offer of AMP for a price of $1.85. The company said that it continues to engage constructively with Ares in relation to AMP Capital as part of the portfolio review.

The company said that its underlying net profit was down 33% to $295 million, reflecting the impacts of COVID-19 on clients, AMP and the broader economy and financial markets. The FY20 statutory profit was $177 million, reversing the $2.5 billion loss in FY19.

AMP’s assets under management (AUM) in Australian wealth management was down 8% and in AMP Capital was down 7%.

The ASX 200 company decided not to declare a dividend, though it did have $521 million of surplus capital at 31 December 2020.

AMP said that 80% of the client remediation is now complete. It’s on schedule to be fully complete in the middle of 2021.

The review of the business confirmed the best outcome for shareholders is the transformation of the Australian wealth management and AMP bank, as well as the New Zealand wealth management businesses. It’s reviewing options for AMP Capital.

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Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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