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Telstra net profit and earnings take a hit

Net profit decreases 6.4 per cent and earnings dips 6.6 per cent
Andy Penn (Telstra)

Andy Penn (Telstra)

Telstra has seen its net profit take a 6.4 per cent hit down to $1.2 billion and underlying earnings before tax (EBITDA) decreased 6.6 per cent to $3.9 billion for the first half of the 2020 Financial Year, ending December 31.

Reported EBITDA was up 12.1 per cent to $4.8 billion. 

Telstra CEO Andrew Penn admitted the telco continued to face challenges within its business and across the telecommunications sector, but said it was continuing to make strong progress in delivering its T22 strategy. 

Telstra reduced underlying fixed costs by 12.1 per cent to $422 million, which it attributed to the progress of its T22 strategy. Since FY16, underlying fixed cost reductions were at $1.6 billion. 

“However, our T22 strategy gives us a detailed understanding of what we need to achieve and how we will get there,” Penn said. 

“Our resolve is to focus on the things that are within our control, and it’s particularly pleasing to see a continued strong performance on reducing our costs and delivering new and simplified products and services to our customers.”

Penn said it had 2.4 million services on its new simplified plans, citing that during the first half, the business added 137,000 retail post-paid mobile services that includes 91,000 from its Belong brand, 135,000 retail prepaid mobile services, and 173,000 pre-and postpaid, and IoT Wholesale services.

The telco revealed it had incurred one-off costs related to the bushfires of about $10 million during the first half of FY20 that included assistance to customers, refunds and donations. It expects the total impact of the bushfires to be in the order of $50 million.  

The telco said it was focusing its resources on reconnecting affected communities and providing disaster assistance packages for more than 34,000 customers.