Telstra profit up 14.3 per cent to $4.27 billion

TELSTRA has increased its dividend after lifting its full year profit by more than 14 per cent. The telco made a net profit of $4.27 billion.

David Thodey / Catherine Livingstone announcement - David Thodey announced as new CEO of Telstra replacing Sol Trujillo and Catherine Livingstone replaces Donald McGauchie as Chairman.

TELSTRA has increased its dividend after lifting its full year profit by more than 14 per cent.

The telco made a net profit of $4.27 billion for the year to June 30, 2014, up 14.3 per cent from $3.74 billion in 2012/13. It lifted its fully-franked final dividend one cent to 15 cents per share, taking its full year distribution to 29.5 cents, up from 28 cents in 2013.

It also announced a $1 billion off-market share buyback to boost shareholder returns.

The result was boosted by a $561 million profit sale of Telstra’s Hong Kong mobile business CSL, which helped lift total earnings 9.5 per cent to $11.1 billion.

Telstra expects low single digit growth in underlying earnings 2014/15, but warned total earnings are likely to be flat because of the impact of the CSL sale.

“The flat earnings guidance arises because we sold CSL during the year so we lose the benefit next year of the revenue and EBITDA (earnings before interest, taxes, depreciation and amortisation) from that,” the company’s chief financial officer Andy Penn told AAP.

“Ignoring that, our underlying earnings are growing consistent with the rate that they have been growing.”

Excluding the impact of the of the CSL sale, Mr Penn said Telstra lifted its earnings 4.7 per cent, while income was up 3.5 per cent.

Mobile revenue was up 5.1 per cent to $9.7 billion and the company added 937,000 new mobile customers during the year.

“Whether you look at it at a headline level or an whether you look at it at an underlying level, it was a very strong result, and that, of course, enabled us to increase the level of return to our shareholders,” he said.

The telco increased its dividend for the second time this year after keeping it flat since 2006.

Mr Penn said Telstra was continuing to look for ways to grow its business, including its $US270 million ($A292.13 million) acquisition of online video business Ooyala this week.

“We’ve announced a half a billion dollars worth of acquisitions over the last 12 months and we’ve invested $1.2 billion in the mobile network.

Originally published as Telstra profit up 14.3 per cent to $4.27 billion