Telstra (ASX:TLS) lifts dividend despite drop in profits & earnings

Image Source: © Tktktk | Megapixl.com

Highlights: 

  • Telstra announced the financial results for FY22 on the ASX today. 
  • Telstra has increased its dividend for the first time in seven years. 
  • However, the company’s profits came down by 4.6%, revenue dropped 1.5% in FY22 as compared to the previous corresponding period. 

Australian telecommunication giant Telstra Corporation Limited (ASX:TLS) announced the FY22 results on the ASX today. The company has raised its dividend after seven years, followed by the successful completion of T22 and strong business momentum. 

Backed by this update, the shares of Telstra opened strong and were spotted trading 1.496% higher at AU$4.07 per share at 10:54 AM AEST on the ASX on Thursday morning. 

Details of Telstra’s FY22 results: 

The telecommunications giant has reported a total income of AU$22 billion in FY22, down by 4.7% from the previous corresponding period. 

Telstra delivered an EBITDA of AU$7.3 billion in FY22, down by 5% from the previous corresponding period. 

On the other hand, Telstra’s Net Profit After Tax (NPAT) came down to AU$1.8 billion, 4.6% lower than the NPAT of the previous corresponding period. 

Earnings Per Share (EPS) stood at 14.4 Australian cents, down by 7.7% from the previous corresponding period. 

Although Telstra reported slashed down earnings in FY22, its financials have exceeded its expectations in the given period.

Image source: © Jirsak | Megapixl.com

Telstra’s dividend distribution: 

The board of Telstra determined to pay a fully franked dividend worth 8.5 Australian cents per share to its eligible shareholders based on its earnings in FY22. Therefore, the total dividend in FY22 sums up to 16.5 Australian cents per share. 

The total dividend represents an increase in the ordinary dividend from 10 to 13.5 Australian cents per share. As a result, Telstra is likely to return AU$1.9 billion to its shareholders on top of the successful share buyback of AU$1.3 billion in May 2022. 

Telstra’s CEO, Andy Penn, said that that was the first time since 2015 that Telstra’s dividend was increased which signifies the company’s confidence in itself. 

Telstra’s FY23 guidance: 

  • The expected total income in FY23 is in the range of AU$23 billion to AU$25 billion. 
  • Telstra is also expecting to deliver an underlying EBITDA of AU$7.8 billion to AU$8 billion in FY23. 
  • Free cash flow after lease payments is likely to be AU$2.6 billion to AU$3.1 billion. 

Telstra’s share price performance on the ASX: 

Over the past 12 months, Telstra’s share price appreciated almost by 6% on the ASX. On the contrary, Telstra’s YTD-based share price fell almost by 4% (as of 11:30 AM AEST on the ASX today). 


 


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