Lending Association

Telstra boosts dividend amid business review

Telstra (ASX:TLS) shareholders will receive a better-than-inflation 5.9% increase in interim dividends to 9 cents per share, despite the telecommunications company acknowledging the need for work on issues within its key NAS (network applications and services) division.

In an early Thursday morning announcement to the ASX, Telstra revealed ongoing challenges with its NAS business, prompting a thorough review of the division and its operations. CEO Vicky Brady stated that the company is committed to addressing performance issues in its Enterprise business through immediate actions focusing on cost and revenue optimization.

The company adjusted its earnings guidance for the fiscal year ending June, narrowing the range to $8.2 to $8.3 billion due to NAS-related challenges. Despite these adjustments, Telstra remains steadfast in its commitment to cost reduction and capital discipline, aiming to achieve its growth ambitions by the end of FY25.

Telstra’s interim financial results showed a modest revenue increase of 1.2% to $11.7 billion, with EBITDA rising by 3.8% to $4 billion. Net after-tax profit also saw growth, up 11.5% to $1 billion for the half-year period. CEO Vicki Brady emphasized positive momentum driven by mobile, Fixed C&SB, and infrastructure segments, although NAS performance remains a concern.

The company reaffirmed its commitment to its T25 strategy, indicating that overall progress remains on track despite challenges within specific business units. Telstra’s decision to maintain dividend payouts reflects its capital management framework and long-term dividend growth objectives.