TelstraClear has done little to help its Australian parent reverse its slowing revenue growth, reporting flat earnings for the first half.The subsidiary of Australia's Telstra showed a slight increase in revenue for the six months to December with total i
TelstraClear has done little to help its Australian parent reverse its slowing revenue growth, reporting flat earnings for the first half.
The subsidiary of Australia’s Telstra showed a slight increase in revenue for the six months to December with total income of $348 million, up $2 million on the same period a year ago.
But as operating expenses increased by $2 million to $274 million earnings before interest and tax remained the same at $4 million.
TelstraClear’s policy is not to comment on its half-year performance.
Last December Telstra announced it would operate its New Zealand and Australian businesses as part of a single transtasman market.
Across the Tasman, Telstra posted a 3.3% drop in first half earnings on declining sales of fixed-line services.
Net profit for the six months to December 31 fell to $A1.85 billion from $A1.92 billion a year ago.
The company intends to keep its interim dividend at 14 cents a share.
First half sales revenue fell 2.5% to $A12.32 billion from $A12.64 billion.
"This reflects challenging market conditions due to changing calling behaviors and stronger price competition," chief executive David Thodey said.
Telstra also cut its annual sales forecast and is now expecting to post a “low single digit decline” in revenue after previously predicting a “flattish” result.
The company affirmed its guidance for annual free cashflow of A$6 billion and “low single-digit” growth in earnings before interest, taxes, depreciation and amortisation (ebitda).
“Very Little to like”
IG Markets analyst Ben Potter said there was “very little to like” about Telstra’s first half result.
“Not only have we seen it miss expectations on net profit and dividend projections, the outlook is uninspiring. The company has flagged a low single digit drop in 2010 revenue; a more severe decline than anticipated in their fixed line business; a slowing Australian broad band market; and no near term resolution to its NBN discussions with the government.”
A number of analysts had expected Telstra announce a resolution to its stand-off with the Australian government today.
The Rudd government has demanded Telstra operationally separate its wholesale and retail divisions asthe price of participation in the $A43 billion national broadband network.
Legislation has also been introduced requiring Telstra to sell its 50% stake in Foxtel before it gains the right to bid for 4G radio spectrum.
MORE: TelstraClear launches 3G (with a little help from Vodafone)
