Telstra’s net profit has absorbed a 4.6 per cent hit down to $1.8 billion while total income sank 4.7 per cent down to $22 billion for the financial year ending 30 June.
Earnings before interest, tax, depreciation and amortisation (EBITDA) also fell 5 per cent to $7.3 billion.
Outgoing Telstra CEO Andy Penn said Telstra’s T22 strategy had set the company up well to manage through the current uncertain economic climate and created the foundation for growth.
“Telstra is a very different company today and while of course there is always more to do, we are much better equipped to face the very exciting digital future ahead,” Penn told shareholders.
“What we could not have foreseen was COVID and the other seismic economic, political and social changes that have unfolded.
“While we are by no means immune, the transformational changes we made through T22 have prepared us well to manage through the uncertainty – we are a much simpler, more agile, more efficient, leaner, more customer-focused and more digitally-enabled business.”
Despite the dip in financial performance, Penn highlighted Telstra’s core business performed strongly.
Its Enterprise segment returned to growth at both the income and EBITDA level. Fixed Enterprise EBITDA increased 2.3 per cent, with network applications and service – which Telstra Purple falls into – EBITDA growth of $152 million offsetting declines in data access and connectivity.
In November, a five-year contract was renewed with the Australian Department of Defence to deliver critical network and telecommunications services in a deal worth over $1 billion – the largest ever customer contract signed by Telstra Enterprise.
The telco also increased its dividend for the first time in seven years at 8.5 cents per share, also marking the end of the National Broadband Network (NBN) one-off related special dividend given the NBN rollout is complete and Telstra met its commitment to return in the order of 75 per cent of net one-off NBN receipts to shareholders over time.
Telstra’s mobile business performed very strongly with $700 million EBITDA growth up 21.2 per cent, 2.9 per cent postpaid handheld annual revenue per user (ARPU) growth and 6.4 per cent mobile services revenue growth.
Additionally, 155,000 net retail postpaid handheld services were added, including 121,000 branded with a strong contribution from Enterprise. On top of this, 1 million internet of things (IoT) services were added, along with 218,000 wholesale services.
InfraCo Fixed income was $2.4 billion, with core access revenue up 3.1 per cent, including NBN recurring receipts up 3.3 per cent.
Amplitel was established as a standalone business with sale of a non-controlling 49 per cent interest delivering net cash proceeds after transaction costs of $2.8 billion with a revenue increase of 8.9 per cent.
The telco said performance in fixed for consumer and small business customers was more challenged and continued to be impacted by the tail end of the NBN migration, however there is confidence EBITDA has bottomed.
While retail bundles reduced by 87,000, bundle and standalone data ARPU increased by 2.4 per cent.
Telstra also committed $616 million to secure the maximum possible amount of low band spectrum and established a partnership with global satellite communications company, Viasat, to support its new Asia Pacific satellite constellation, and a significant upgrade of Telstra’s nationwide inter-city fibre network.
EBITDA in Telstra's existing International business grew 15.2 per cent. In addition, the recently completed acquisition of Digicel Pacific in partnership with the Australian government delivered 100 per cent ordinary equity in a strategically and financially important asset in the Pacific with a very close alignment to Telstra’s core strengths.
Telstra Health also witnessed a strong financial year with revenue up 51 per cent to $243 million after including the MedicalDirector and Power Health acquisitions and is on track to become a $500 million revenue business by FY25.
Plans were also revealed to launch an energy business with the ambition to provide a simple, sustainable and integrated energy proposition, using Telstra’s channels and relationships to build scale.
However, with the current state of the retail energy market going through severe dislocation, Telstra won’t be scaling this business unit in FY23 as it continues to review market dynamics.