Telstra (ASX:TLS) Unveils Strong HY25 Results, Bigger Dividend, and Share Buyback

Highlights

• Telstra reports 6.5% growth in net profit and a 5.6% dividend increase
• A $750 million share buyback announced, set to commence after March 12
• Mobile service revenue rises by 3.1% with ARPU growth across key segments

Telstra (ASX:TLS) has drawn investor attention following the release of its FY25 half-year results, featuring solid financial growth, an expanded dividend, and a significant share buyback plan. The latest update underscores strong operational efficiency and positive momentum across its core business segments.

HY25 Financial Performance

For the first half of FY25, Telstra (ASX:TLS) reported a 0.9% increase in total income, reaching $11.8 billion, with operating expenses decreasing by 1.8% to $7.6 billion. The telco achieved a 6% rise in EBITDA, now at $4.2 billion, while net profit surged 6.5% to $1 billion.

In line with this growth, the dividend per share increased by 5.6% to $0.095, reinforcing Telstra’s commitment to returning value to shareholders.

Divisional Performance Breakdown

Telstra’s mobile division remained a key growth driver, recording a 3.1% increase in mobile service revenue. This was fueled by handheld user price adjustments and wholesale division growth, despite some offset from mobile broadband. The number of mobile handheld users grew by 110,000 across postpaid, prepaid, and wholesale services.

Average revenue per user (ARPU) improved across multiple segments, with prepaid ARPU up 6.5%, wholesale revenue growing around 6%, and consumer & small business revenue rising 0.8% following price adjustments in late 2024.

The fixed broadband division saw a 2% decline in income to $2.2 billion, but EBITDA surged 74.3% to $183 million, benefiting from price increases, margin expansion, and growth in fixed wireless services.

Enterprise fixed services reported a 35.2% EBITDA growth to $96 million, attributed to cost efficiencies, though revenue dipped slightly. International income fell by 5% to $1.3 billion, but EBITDA in this segment rose 8% to $373 million, driven by an improved product mix and cost reductions.

Meanwhile, InfraCo Fixed EBITDA climbed 7% to $892 million, supported by increasing infrastructure demand, higher contractual revenue from NBN, and lower costs.

$750 Million Share Buyback Plan

Telstra announced a share buyback of up to $750 million, demonstrating confidence in its financial position and future prospects. The company emphasized maintaining a strong balance sheet with a debt-to-EBITDA ratio of 1.9 times, well within its preferred range of 1.5 to 2 times.

The buyback is scheduled to commence after March 12, 2025, reinforcing the company's focus on efficient capital management.

Outlook and Market Position

With steady profit growth, a rising dividend, and strategic capital management, Telstra continues to strengthen its position among ASX blue-chip stocks. The company’s focus on operational efficiency, price adjustments, and network expansion provides a solid foundation for future performance.