Telstra share price on watch amid strong half-year profit growth

Hold the phone! Telstra has delivered strong growth during the first half

| More on:
A happy man and woman sit having a coffee in a cafe while she holds up her phone to show him the ASX shares that did best today.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Telstra has released its half year results and reported solid top and bottom line growth
  • The telco giant's mobile business was a key driver of its strong performance
  • Telstra has lifted its dividend by 6%

The Telstra Group Ltd (ASX: TLS) share price will be one to watch this morning.

That's because the telco giant has just released its half-year results.

Telstra share price on watch amid strong growth

What happened during the half?

For the six months ended 31 December, Telstra reported a 6.4% increase in total income to $11.6 billion. This was driven by momentum from its mobiles business and support from the acquisition of Digicel Pacific.

The star of the show was Telstra's mobile business, which reported continued growth in revenue, average revenue per users (ARPU), services in operation (SIO), and earnings. Mobile services revenue was up 9.3%, assisted by the return of international roaming. Postpaid handheld ARPU was up 4.5% and SIOs up a net 68,000. Prepaid handheld revenue was up 28.7% with unique users up 137,000.

This was supported by growth in the Fixed Consumer and Small Businesses, InfraCo Fixed, and International businesses, and partially offset by weakness in the Fixed Enterprise business due to impacts from ongoing disruption from technology change and competition.

And although inflation is having an impact on Telstra's operations, it has been using cost mitigants and revenue levers to offset this.

On the bottom line, Telstra reported a 25.7% increase in net profit after tax to $0.9 billion. This allowed the company's board to increase its dividend by 6.3% to 8.5 cents per share. This will be paid to shareholders on 31 March.

Management commentary

Telstra's new CEO, Vicki Brady, was pleased with the half. She said:

We are a growing business with a lot to be excited about in our future, and our T25 strategy provides a clear roadmap to get us there. On the back of our continued growth, the Board resolved to pay a fully franked interim dividend of 8.5 cents per share representing a 6.3 percent increase on the prior corresponding period, and in line with the second half of last financial year. The interim dividend is consistent with our policy to maximise the fully franked dividend and seek to grow it over time.


Telstra has reaffirmed its guidance for FY 2023 across all measures.

However, it now expects its income to be at the bottom end of guidance due to mobile hardware and fixed product revenues being lower than expected.

Telstra's guidance is for:

  • Total income of $23 billion to $25 billion
  • Underlying EBITDA of $7.8 billion to $8 billion
  • Capex $3.5 billion to $3.7 billion
  • FCFaL of $2.6 billion to $3.1 billion

Looking further ahead, management has reiterated its commitment to its $500 million FY 2025 cost out ambition.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

Delighted adult man, working on a company slogan, on his laptop.
Earnings Results

Bank of Queensland share price leaps 6% on improving outlook

ASX 200 investors are bidding up the Bank of Queensland share price on Wednesday.

Read more »

Photo of two women shopping.
Earnings Results

Premier Investments share price jumps 9% on results and demerger plans

The Smiggle and Peter Alexander owner has released its results. How did it perform?

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Earnings Results

Soul Patts share price struggles on falling profits

ASX 200 investment house Soul Patts reported its half year results this morning.

Read more »

a biomedical researcher sits at his desk with his hand on his chin, thinking and giving a small smile with a microscope next to him and an array of test tubes and beackers behind him on shelves in a well-lit bright office.
Earnings Results

Chemist Warehouse merger target Sigma reports 149% FY24 profit jump

This could be the last set of results from Sigma as we know it if its merger is approved.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Earnings Results

Brickworks share price tumbles on disappointing half-year loss

This loss didn't stop the company from increasing its dividend again.

Read more »

A man sits on a bench atop a mountain with a laptop, making investments with a green ESG mind.
Earnings Results

ASX All Ords stock KMD tumbles as interim dividend cancelled

Investors are hitting the sell button on ASX All Ords stock KMD today.

Read more »

Coal miner holding a giant coal rock in his hand making a circle with his hand, symbolising a rising share price.
Energy Shares

New Hope share price charges higher despite profit crunch and huge dividend cut

Weaker coal prices have hit this miner's profits and dividend hard.

Read more »

A Chinese investor sits in front of his laptop looking pensive and concerned about pandemic lockdowns which may impact ASX 200 iron ore share prices
Earnings Results

Liontown share price tumbles 7% on half-year results

This lithium developer's results have been released this afternoon.

Read more »