Telstra FY19 earnings update: adjusting to a new normal…

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Telstra FY19 earnings update: adjusting to a new normal…

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Telstra FY19 earnings update: adjusting to a new normal…
On 15th August 2019, Telstra announced its FY19 earnings.
Falling ARPUs and NBN related impacts outweighed subscriber gains resulting in earnings declines.
The Australian telco market remains competitive with nearly all sub-segments experiencing varying degrees of pricing pressure. Telstra as the market leader is most at risk as competitors increase share across different segments.
On 15th August 2019, Telstra announced its FY19 financial results. Some of the key highlights from the announcement include:
  • Revenue of A$27.8bn, down 3.6% over FY18 driven by competitive pressures across all segments of the Australian telco market
  • EBITDA decreased 21.7% to A$8.0bn driven by Telstra absorbing about A$0.6bn of the negative impact from the NBN in FY19. The remaining decline in EBITDA was mainly driven by lower mobile revenues and lower revenues from Data and IP
  • Overall net profit of A$2.1bn, down 39.6% over FY18 driven by higher restructuring costs associated with Telstra’s T22 strategy and NBN related headwinds

Contents

Our take

Telstra FY19 earnings update

  • Mobile
  • MVNOs
  • Sports and media content are a key focus area
  • Fixed – NBN impact continues…
  • Enterprise
  • InfraCo
  • T22 strategy scorecard
  • 5G and IoT – the two main growth drivers for Telstra
  • Our take

List of charts/tables

Figure 1. FY19 Telstra key financials (A$bn)

Figure 2. Product performance: Mobile 2H19

Figure 3. NBN impact on Telstra’s EBITDA

Figure 4. Telstra InfraCo performance

Figure 5. Telstra T22 strategy scorecard