Telstra profit down as fixed line revenue falls

Telstra has announced a sales revenue decline of 2.5 percent for the six months to December 2009 reaffirming its profit guidance for fiscal 2010 due to challenging market conditions.

In a statement by Telstra chief executive David Thodey he indicated Telstra had seen a decline in adjusted revenues in the first half despite good performances in mobile data, wireless broadband and IP data.

‘‘This reflects challenging market conditions due to changing calling behaviours and stronger price competition. Despite these challenges, we expect a modest improvement in the trends in the second half of fiscal 2010 with our new offerings, new pricing plans, and new revenues from major contract wins,’’ Mr Thodey said.

Highlights of the Telstra half yearly report included:

Sales revenue declined by 2.5% or $321 million to $12,323 million
EBITDA declined by 0.3% or $17 million to $5,317 million
Basic earnings per share declined by 3.5% to 15.0 cents
A capex to sales ratio of 13%, meaning strong free cash flow had not come at the expense of investment

Wireless broadband revenue growth of 32% to $368 million (with customer numbers increasing to 1.3 million) and IP access revenue growth of 21% to $393 million as major corporate and government customers migrated from legacy to IP systems, offering Telstra the opportunity to provide additional managed services.

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