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The Telstra Group Ltd (ASX: TLS) witnessed a 1% increase in its share price, reaching $3.93 on Tuesday morning, following a positive response from investors to the company's annual general meeting (AGM) update.
During the AGM, Telstra's management provided insights into the past 12 months and offered a brief outlook for the fiscal year 2024 (FY 2024). Telstra's CEO, Vicki Brady, reinforced the company's guidance for the upcoming year, anticipating underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) to align with its T25 ambition, targeting a mid-single-digit growth rate.
Brady reiterated Telstra's capex guidance of $3.6 billion to $3.7 billion, including approximately $300 million for strategic investments beyond regular operations, dedicated to projects such as the intercity fibre and Viasat infrastructure initiatives.
For income-focused investors, Brady's reassurance that Telstra expects to maintain robust cash flow, facilitating growth investments and shareholder returns, is a positive signal.
Acknowledging inflationary pressures impacting costs, Brady recognized the challenges in cost reductions but expressed confidence in achieving the majority of the company's goals by FY25. She stated:
"While our cost-out ambition is being challenged by high inflation, we still expect to achieve the large majority of this by FY25. We remain absolutely committed to delivering our underlying EBITDA and EPS growth ambitions."
Responding to questions about the decision to retain InfraCo Fixed assets instead of divesting them, Brady emphasized their strategic value in supporting Telstra's dividend in the near term. She stated:
"We also made the decision to maintain the current ownership structure of InfraCo Fixed, at least for the medium term, as we believe this will create the greatest value for shareholders. Our focus remains on delivering long-term, sustainable growth, and the objectives and principles of our capital management framework, including seeking to grow our dividend. InfraCo Fixed plays an important role in enabling this, particularly in an inflationary environment."
With a positive trajectory, gaining approximately 3.5% over the last 12 months, the Telstra share price reflects the confidence of investors. As stakeholders evaluate Telstra within the landscape of ASX communication stocks, these updates offer valuable insights into the company's strategic direction and financial expectations for the coming fiscal year.
