Telstra posts first half-year AUD$2 BEEELLION profit

Australia's dominant telco, Telstra, has posted sterling half-year results.

Income for the period to December 31st, 2014, was up 1.6 per cent to AUD$13.0 billion and earnings per share increased 23.4 per cent to 16.9 cents.

Speaking of those shares, they're now at around $6.50 apiece, a price not seen since the early 2000s when the company dominated the directory business with its since-Google-quashed Yellow Pages publications.

Net profit after tax increased 21.7 per cent or $378 million to $2.1 billion, the first time the company has posted a $2 billion profit number. Capital expenditure decreased to $1.7 billion, not a shocker as telco capex can be a drag on the bottom line.

There's even good news in the parts of the business going backwards, such as fixed voice, because it's going backwards more slowly than has been the case in the past.

New bits of the business like the cloud-and-services-centric Network Applications and Services (NAS) outfit recorded good growth of 18.1 per cent, taking its revenue over the billion-dollar mark. At that level, Telstra becomes a dominant IT services player in Australia, and has a foothold beyond the island nation as the unit found $41m of offshore. Mobile growth was decent, not stunning, with 366,000 new retail mobile customers taking revenue up 9.6 per cent to $5.3 billion.

CEO David Thodey said the company will deliver on its promised annual targets. He also re-introduced a dividend reinvestment plan whereby shareholders can choose to take dividends in the form of additional stock, an arrangement that would have excited few investors in recent years when share price growth was elusive and dividends were flat.

Telstra's dividend this time around was 15 cents a share, up half a cent on its last half-yearly results. With Australia's cash interest rate at two-and-a-quarter per cent and the expectation of a thirty-cents-per-share-per-year dividend, the company looks a mighty fine place to park some cash.

Thodey said the cashed-up company is always looking at acquisitions, possibly to Australia's north, but has none to announce at present. ®

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