Telstra (ASX:TLS) Share Price Rises After Positive FY 2024 Results and Upgraded Guidance

2 min read | August 15, 2024 12:50 PM AEST | By Team Kalkine Media

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Shares of Telstra Group Ltd (ASX:TLS) are up nearly 1% to AU$3.90 on Thursday morning, buoyed by the company's impressive financial results for the fiscal year 2024 (FY 2024). Investors are reacting positively to Telstra's strong earnings and optimistic guidance for the coming year.

Financial Highlights from FY 2024

Telstra's results for FY 2024 showed notable growth across several key metrics:

Total Income: Increased by 1% to AU$23.5 billion, driven by growth in Mobile, International, InfraCo fixed, and Amplitel segments.
Mobile EBITDA: Rose by 9.2% to AU$5,026 million, reflecting robust revenue growth and cost efficiencies.
Underlying EBITDA: Grew by 3.6% to AU$8.2 billion.
Underlying Net Profit After Tax (NPAT): Jumped 7.5% to AU$2.3 billion.
Full-Year Dividend: Raised by 5.9% to 18 cents per share, fully franked.

CEO Comments and Strategic Outlook

Telstra's CEO, Vicki Brady, highlighted the company's disciplined execution of its strategy, leading to its third consecutive year of underlying growth. "Our mobiles business has continued to perform very strongly, with EBITDA growth of over AU$400 million," Brady noted. This growth was driven by increased customer numbers and higher average revenue per user (ARPU).

Looking forward, Telstra has guided for further underlying EBITDA growth in FY 2025. The company expects EBITDA to be in the range of AU$8.5 billion to AU$8.7 billion, an upward adjustment from its previous guidance of AU$8.4 billion to AU$8.7 billion.

Broker Reaction and Market Impact

Goldman Sachs reacted positively to Telstra’s results, noting that the company's net profit exceeded expectations. The broker highlighted the following points:

Income/EBITDA/NPAT: Reported at AU$23.4 billion, AU$8.24 billion, and AU$2.14 billion, respectively. This was close to Goldman Sachs' estimates and Visible Alpha consensus.
Balance Sheet: Gearing increased to 2.1x, up from 1.9x in the first half of FY 2024, due to higher gross debt and seasonal fluctuations in free cash flow (FCF). However, FY 2024 FCF improved by 7% to AU$3.0 billion.
Final Dividend: A final dividend of 9 cents per share (fully franked) was declared, in line with expectations.

Goldman Sachs also noted that Telstra’s guidance for FY 2025 was ahead of consensus expectations. The upgraded EBITDA range of AU$8.5 billion to AU$8.7 billion aligns with Goldman Sachs' estimate but slightly exceeds Visible Alpha consensus.

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