Telstra has increased its dividend for the first time in eight years as it gains almost 740,000 new mobile customers and lifts its half yearly profit by nearly 10 per cent.
Telstra made a net profit of $1.7 billion in the six months to December 31, up 9.7 per cent on the corresponding period.
For the first time since 2006, Telstra has increased its dividend.
Shareholders will receive an interim dividend of 14.5 cents a share, an increase of 0.5 cents on a year ago.
Telstra chief executive David Thodey said the telco had been waiting until it delivered a strong performance before increasing returns for shareholders.
“In terms of the increase in dividend, it’s purely the result of us performing well,” he said.
“The board has said it was their intention to increase returns for shareholders and that’s exactly what they’re doing, but it would be done as the company performed.”
During the half Telstra attracted 739,000 new mobile customers, taking its total number of mobile customers to 15.8 million.
Mr Thodey said he believed this was because the telco had the widest mobile coverage in Australia at 2.3 million square kilometres and the company would invest in it to ensure it stayed that way.
“They want a network that is connected quickly, that’s reliable service, doesn’t have drop outs and has very few black spots,” he said.
Telstra’s 4G network now covers 85 per cent of the Australian population and had 4.1 million customers.
Mr Thodey said Telstra had started negotiations with the government and NBN co on potential changes to current agreements for the NBN rollout.
“We are committed to acting in the best interests of our shareholders, and are focused on maintaining the value of the current agreements, achieving certainty of outcome as soon as reasonably possible and minimising any additional regulatory risk,” he said.
Telstra had recommenced pit remediation work during the half after it implemented addition safeguards in relation to asbestos handling.
The company confirmed full year guidance of low single digit income and earnings growth.
Morningstar analyst Scott Carroll said the result was in line with expectations with little surprises.
“Broadly it’s a pretty vanilla result and frankly that’s what the market is looking for these days,” he said.
“That’s one of the attraction of this stock. It has a higher degree of earnings certainty than most consumer or retail products business.”
At 1514 Telstra shares were up four cents, or 0.78 per cent, to $5.15.
