Telstra Group Ltd (ASX: TLS) shares are on the slide on Thursday morning.
At the time of writing, the telco giant's shares are sown 2.5% to $4.85.
This follows the release of the company's full year results before the market open.
Image source: Getty Images
Telstra shares fall on results day
Investors have been selling the company's shares this morning after responding negatively to its full year results.
For the 12 months ended 30 June, Telstra reported a 14% increase in EBITDA to $8.6 billion. On an underlying basis, EBITDA was up 4.6% on the prior corresponding period.
And on the bottom line, the company posted a 31% increase in reported net profit after tax to $2.3 billion and a 1.8% increase in underlying net profit after tax.
A key driver of this growth was its key mobile business. Mobile EBITDA grew $235 million year on year thanks to higher ARPU. Mobile services revenue grew by 3.5%.
Telstra's CEO, Vicki Brady, notes that this was the fourth year in a row of growth. She said:
FY25 was a strong year for Telstra as we continued to deliver for customers and shareholders. We delivered our fourth consecutive year of underlying growth, reflecting momentum across our business, strong cost control and disciplined capital management.
As for the discrepancy between its reported and underlying results, Brady adds:
Our reported growth this year is stronger than underlying growth because of significant one-off net costs totalling $715 million in the prior year, mostly related to impairments and restructuring associated with the reset of our Telstra Enterprise business.
Our underlying growth more accurately reflects our financial performance compared to the prior period, excluding significant one-off items and other adjustments.
In light of its underlying growth, the Telstra board elected to declare a fully franked dividend of 19 cents per share for FY 2025. This is an increase of 5.6% year on year.
But the returns won't stop there. Telstra has announced an additional on-market share buy-back of up to $1 billion. This follows the completion of a $750 million on-market buy-back in June 2025.
There may be even more funds to return to shareholders in the near future. That's because Telstra has signed a strategic partnership with Infosys to divest a majority stake in Versent Group for $233 million Telstra will retain a 25% stake in the group.
Outlook
Looking ahead, Telstra is guiding to underlying EBITDA (after lease amortisation) of $8.15 billion to $8.45 billion and cash EBIT of $4.55 billion to $4.75 billion. The latter will be a 5.5% to 10% increase year on year.
Telstra CFO Michael Ackland said:
We have reflected the metrics we outlined at our recent Investor Day in our guidance, as we focus on driving cash earnings as part of our strategy to create value. Underlying EBITDA has been replaced with Underlying EBITDA after lease amortisation – or EBITDAaL – reflecting a broader measure of costs in our business.
We are guiding on Cash EBIT in FY26, which is made up of underlying EBITDAaL, business-as-usual capex, and spectrum amortisation. Cash EBIT is a close proxy for Free Cash Flow and drives management focus on all of these costs.
