Telstra on Thursday announced that it will boost its interim dividend as first-half results showed an increase in mobile customers and bottom line growth.
The Australian operator will return A$1.8 billion to shareholders, paying out a dividend of 14.5 cents per share.
It added 739,000 retail mobile customers in Australia in the last six months of 2013 – its fiscal first half – taking its customer base to 15.8 million. That increase helped to drive 3.6% revenue growth to A$12.6 billion and an increase of 9.7% in net profit to A$1.7 billion. EBITDA increased by 7% to A$5.3 billion
Mobile service revenues grew by 7.3% to A$4.1 billion.
"We continued to invest in maintaining our network leadership, highlighted by our $650 million capital investment in mobile infrastructure in the half," said Telstra CEO David Thodey, in a statement.
"Telstra has one of the fastest take-ups of the 4G network anywhere in the world," Thodey added, noting that the telco's mobile customer base includes 4.1 million 4G devices. "We expect to see continued growth in this area," the CEO said.
Thodey also highlighted key asset disposals announced by Telstra recently: in December it agreed to sell its CSL unit in Hong Kong for US$2.43 billion and in January brokered a A$454 million deal to offload a 70% stake in its Sensis directories business. The anticipated proceeds from those sales are incremental to Telstra's guidance for free cash flow of $4.6 billion-$5.1 billion for fiscal year 2014, to 30 June. Free cash flow for the first half declined by 23.4% to A$1.65 billion, but excluding proceeds from the sale of TelstraClear in the year-ago period free cash flow grew by 11.2%.
"We expect these transactions to complete in the second half of the fiscal year, subject to approvals, and we will deal with these proceeds in accordance with the principles outlined in our capital management framework," Thodey said.
Telstra confirmed its guidance for the full year. It expects low single-digit growth in total income and EBITDA, with capex coming in at around 15% of sales.