Is Telstra Going To Zoom Up Further?

  • Mar 30, 2019 AEDT
  • Team Kalkine
Is Telstra Going To Zoom Up Further?

A telecommunication service provider, Telstra Corporation Limited (ASX: TLS) operates in four segments; Telstra Wholesale, Telstra Operations, Telstra Consumer and Small Business and Telstra Enterprise. It offers solutions across television/internet protocol, mobiles broadband, telephony, digital content, online self-service capabilities, including buying, billing requests, management services for government and medium to large businesses. Additionally, the company functions into the development of industry vertical solutions, planning, design, engineering, architecture and construction, information technology and networks solutions.

The company announced bond issue (the Notes) priced at EUR 600 million for general corporate purposes, under its Debt Issuance Program Offering on March 12, 2019, circular. It will have a coupon of 1.375% with maturity on March 26, 2029.

In another update, Roy H Chestnutt acquired 43,000 ordinary securities (Indirect Interest) of the company with the total consideration of $138,629.23.

In its half-yearly result, the company reported a decrease in its total income by 4.1% to $13.8 billion, which was due to a roll out of the nbn™ Network. Excluding nbn™, the company’s underlying business performed well in H1 FY19, as it added 239,000 additional retail postpaid mobile services. About 125,000 mobile services were added by Telstra Wholesale, which comprised a mix of prepaid and postpaid. The company also witnessed positive momentum in IoT with revenue growth of 35.6%.

The company’s EBITDA (reported basis) decreased by 16.4% to $4.3 billion, and NPAT decreased by 27.4% to $1.2 billion.

The Board of Directors declared a fully franked interim dividend of 8 cents per share with payment date of March 29, 2019, and record date of February 28, 2019, which includes ordinary dividends of 5 cents per share and a special dividend of 3 cents per share in-line with the Telstra’s August 2017 dividend policy, which marks a fully franked ordinary dividends of between 70% to 90% of underlying earnings.

Telstra CEO, Andrew Penn, stated that despite short term challenges, they are excited with the significant increase in retail postpaid mobile services. They expect the demand for telecommunication products and services will continue to grow over the next decade. It is expected that with the onset of 5G, ARPU will improve. nbn wholesale prices are also expected to improve in the future, as per company’s T22 strategy announced in June 2018, to digitise the business and investments as per changing market dynamics and customer expectations. Importantly, Telstra may launch early 5G services in 2019.

In FY19, TLS expects total income in the range of $26.2 billion to $28.1 billion and EBITDA (excluding restructuring charge) in the range of $8.7 billion to $9.4 billion. $1.5 billion to $1.7 billion of EBITDA is expected to come from net one-off nbn definitive agreement receipts minus nbn net cost to connect; capital expenditures to be between $3.9 billion to $4.4 billion; cash flow to be between $3.1 billion to $3.6 billion. There are two reasons, which suggests that cash flow would be at the lower end of the range as Telstra’s capital expenditure is expected to increase in the enterprise and wholesale fibre markets and cash redundancies will be higher due to acceleration in the productivity. Increased competition in the mobile market is another challenge, which might affect the company’s revenue in the forthcoming year. However, the Board is confident in delivering sustainable growth by offering valuable services to its customers.

On the stock information, Telstra Corporation’s share price was noted at $3.310 on March 28, 2019, with the market capitalization of ~$39.49 billion. Its current P/E multiple is at 12.72x, and its earnings per share was reported at A$0.261. The company’s annual dividend yield stood at 3.77%. Its 52 weeks high was noted at $3.336 and 52 weeks low at $2.547. Its absolute return for five years, one year and six months are -31.81%, 5.58%, and 5.07%, respectively.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK