The Telstra Group Ltd (ASX: TLS) share price is pushing higher on Tuesday morning.
At the time of writing, the telco giant's shares are up 1% to $3.93.
Why is the Telstra share price rising?
Investors have been bidding the company's shares higher today after responding positively to its annual general meeting update.
At the meeting, as well as providing a review of the last 12 months, management offered a brief update on its expectations for the FY 2024.
According to the release, Telstra's CEO, Vicki Brady, has reaffirmed the company's guidance for the year ahead.
She is expecting underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) in line with its T25 ambition for a mid-single digit growth rate.
Brady also reaffirmed the company's capex guidance of $3.6 billion to $3.7 billion. This includes around $300 million of strategic investment outside of business-as-usual investments. This relates to the intercity fibre and Viasat infrastructure projects.
And given how Telstra is a big favourite of income investors, they will be pleased to learn that Brady expects the company "to continue to achieve strong cash flow, enabling us to invest for growth and deliver returns to shareholders."
Telstra acknowledged that inflationary pressures on costs is making its cost reductions harder than it would have liked. However, Brady believes the company can still achieve the majority of its goals. She adds:
While our cost out ambition is being challenged by high inflation, we still expect to achieve the large majority of this by FY25. We remain absolutely committed to delivering our underlying EBITDA and EPS growth ambitions.
Brady also defended the company's decision to hold onto its InfraCo Fixed assets instead of divesting them. The CEO believes they will play a key role in supporting the Telstra dividend in the near term. She explains:
We also made the decision to maintain the current ownership structure of InfraCo Fixed, at least for the medium term, as we believe this will create the greatest value for shareholders.
Our focus remains on delivering long-term, sustainable growth, and the objectives and principles of our capital management framework, including seeking to grow our dividend. InfraCo Fixed plays an important role in enabling this, particularly in an inflationary environment.
The Telstra share price is now up approximately 3.5% over the last 12 months.