Telstra maintains dividend as profit drops 15%

[BENGALURU] Australia's Telstra Corp maintained its final dividend on Thursday despite a 15.5 per cent drop in annual profit and a challenging outlook, with tougher competition and slower return to growth in its mobile business.

The Melbourne-based telco declared a final dividend of 5 Australian cents per share, and a special dividend of 3 cents per share. Telstra is one of the country's most widely held companies, with more than 1 million shareholders.

"We have experienced deeper competition across products and slower return to growth, especially in mobile," chief executive Andrew Penn said in a statement.

Telstra said it would keep redundancies on hold for its permanent employees in Australia and internationally until February next year, to provide "certainty" for staff during the Covid-19 pandemic.

Net profit attributable for the year to June 30 was A$1.82 billion (S$1.78 billion), lower than A$2.15 billion a year earlier.

The company expects underlying core earnings of A$6.5 billion to $7 billion in fiscal 2021, and total income of A$23.2 billion to A$25.1 billion. That compares with underlying core earnings of A$7.4 billion and total income of A$26.2 billion in the year to June.

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Telstra has faced persistent headwinds on its fixed-line business from the rollout of a state-owned broadband network.

It froze job cuts in March and brought forward significant capital spending from fiscal 2021 to 2020, at a time when most other Australian firms were slashing costs.

The job cuts were part of a wider restructuring programme launched in 2018 to strengthen its balance sheet and sell assets worth up to A$2 billion by fiscal 2022.

REUTERS