Telstra FY13 profit grows 13%

Dylan Bushell-Embling
09 Aug 2013

Australia's Telstra revealed its FY13 profit grew 12.9% to A$3.9 billion ($3.56 billion), thanks to mobile growth and a windfall from the company's NBN deals.

Revenue for the year ended in June increased 1.9% to A$2.6 billion, with ebitda up 3.9% to A$10.63 billion.

The company added 1.3 million domestic retail mobile customers, with mobile revenue increasing 6% to A$9.2 billion.

Telstra CEO David Thodey said the operator had invested A$1.2 billion in the company's mobile network during the year, on projects including expanding 4G coverage to 66% of the population.

Network applications and services revenue swelled by 17.7% to A$1.5 billion, with cloud income up 33%, UC revenue up 17.7% and managed network services growing 20.7%.

Earnings were augmented by NBN income of A$399 million, including A$303 million from government commitments under Telstra's A$11 billion deal to progressively migrate its fixed-line customers to the national network, and A$89 million from its infrastructure services agreement.

But fixed voice revenue fell 9.5%, with total fixed revenue declining 2.7% to A$7.3 billion.

Wholesale income increased 1.1% to A$2.15 billion. Hong Kong subsidiary CSL contributed 17.6% higher revenue of A$1.01 billion.

Ovum senior analyst for industry, communications and broadband Nicole McCormick said Telstra's results for FY13 were driven by its mobile gains. “Telstra faces increased LTE competition in metropolitan areas, but it has announced plans to spend a similar A$1.2 billion on the mobile network in FY14,” she said.

“This will improve the width and depth of its LTE coverage – where it still maintains an edge on its rivals.”

McCormick added that Telstra's continuing focus on cost cutting, including making an extra A$1 billion in productivity improvements over the next few years, should benefit the customer.

Moody's maintained its ratings on Telstra on the back of the results, but stated that the figures are credit positive.

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