Telstra’s FY24 financial results reveal a resilient performance, showcasing the company’s ability to sustain growth even in the face of challenges. Despite a 13% drop in profit, primarily due to one-off costs related to their Enterprise business, Telstra managed to deliver solid underlying growth across its core segments.
This positive result underscores the effectiveness of Telstra’s strategic initiatives and their commitment to long-term value creation for shareholders, despite market fluctuations.
Strong Performance in Core Segments – Telstra FY24 Results
Telstra’s mobile business continues to be the cornerstone of its success. In FY24, the company saw impressive growth in mobile services revenue, which increased by 5.6%. This growth was fuelled by a rise in Average Revenue Per User (ARPU) and the addition of over 560,000 net new handheld customers.
The strength of the mobile segment was a major contributor to Telstra’s overall underlying earnings growth, with the segment’s EBITDA increasing by over $400 million
The infrastructure segment also delivered robust results. Telstra’s InfraCo Fixed and Amplitel divisions collectively grew their EBITDA by around $150 million, reflecting ongoing demand for Telstra’s high-quality infrastructure assets.
This growth aligns with Telstra’s long-term strategy to invest in future-proofing Australia’s digital infrastructure, such as their intercity fibre network.
Addressing Enterprise Challenges
While most of Telstra’s business segments performed strongly, the Fixed Enterprise division faced significant challenges.
The company acknowledged that this segment is not yet where it needs to be, and in response, Telstra has initiated a comprehensive reset of its Enterprise business.
This includes streamlining the product portfolio, simplifying the customer sales and service model, and re-focusing the tech services business. These actions are part of a broader effort to address the structural issues within the Enterprise division and position it for future growth
Despite the challenges in the Enterprise segment, Telstra’s underlying EBITDA grew by almost $300 million, or 3.7%, to $8.2 billion. This underlying growth also reflected in the company’s underlying Net Profit After Tax (NPAT), which increased by 7.5% to $2.3 billion.
These figures highlight Telstra’s ability to maintain momentum in its core businesses while addressing underperforming areas.
Strategic Investments and Future Outlook
Telstra’s ongoing investments in its mobile network and digital infrastructure are key pillars of its growth strategy. In FY24 alone, the company invested $5 billion in capital expenditures and mobile spectrum payments.
These investments have significantly expanded Telstra’s mobile network coverage, now reaching 99.7% of the Australian population, and have strengthened the company’s position as a leader in the 5G space.
Looking ahead, Telstra remains focused on executing its T25 strategy, which aims to deliver sustainable growth and enhanced customer experiences. The company is confident in achieving its $350 million cost reduction target by FY25, further supported by disciplined execution and strategic investments in high-growth areas.
Telstra’s FY24 results reflect a company that is navigating challenges with strategic foresight and operational discipline. While the profit drop related to Enterprise restructuring posed a short-term setback, the strong performance in the mobile and infrastructure segments, coupled with strategic investments, paints a positive picture for Telstra’s future.
As Telstra continues to invest in Australia’s digital future, the company is well-positioned to deliver sustained growth and value for its shareholders.
