TelstraClear earnings up 18% ahead of sale to Vodafone
BUSINESSDESK: TelstraClear, the New Zealand phone company Telstra has agreed to sell to Vodafone, lifted full-year earnings by 18% before an impairment charge on the business.
Earnings before interest, tax, depreciation and amortisation climbed to $A99 million in the 12 months ended June 30, from $84 million a year earlier, according to Telstra’s annual results, released to the ASX today. Sales fell 2.3% to $A502 million.
Vodafone last month agreed to buy TelstraClear for $840 million, giving the British company a stronger base from which to challenge Telecom. Telstra has taken a $A130 million impairment charge against goodwill for TelstraClear prior to the sale, it confirmed today.
Sydney-based Telstra today posted a 5.4% gain in net profit to $A3.4 billion as sales edged up 1% to $A25.2 billion. It was the second consecutive year of revenue growth after sales tumbled 2.3% in 2010.
Chief executive David Thodey forecast growth in sales and earnings would continue in 2013 at a “low single digit” pace, with the dividend expected to be unchanged from 2012 at 28 cents a share.
Shares of Telstra last traded at $A3.97 on the ASX and have gained 22% this year. The stock is rated a "hold" based on a Reuters poll of 18 analysts, with a price target of $A3.63.
Telstra’s results showed a continuation of the trend of growing mobile sales and shrinking revenue from fixed-line services. Fixed revenue fell 6.1% to $A7.49 billion and mobile gained 8.5% to $A8.67 billion.
Telstra’s fixed-line copper wires are being handed over to state-owned NBN Co as part of plans to roll out a national broadband network in Australia, in return for some $A11 billion.
Telstra’s sale of TelstraClear is subject to regulatory approvals.