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Date : 18/02/2022

Telstra Corporation Ltd (ASX: TLS) is down 4% after announcing half-year results.

Telecoms provider Telstra Corporation Limited is an ASX listed company based in Australia and provides phone, mobile, broadband internet access and pay television and other services.

Telstra has the most Australian wireless users under its belt and is the market leader in the industry. When Australia federated in 1901, the Postmaster-Department General’s was formed, and Telstra and Australia Post were both established. New goods and developing technology emphasize Telstra’s transformation from a state-owned firm to a wholly privatized corporation.

Today the company announced its half-year results, and its stock plunged in the market despite showing growth in the underlying business. In the previous reported fiscal 2021, the revenue was down, but the company’s net income was up. But in the first half of 2022, the revenue and net income both saw a decline, especially net income decline by 34%.

TLS declined more than 4% today

TLS was down in the day trading after announcing its half-year fiscal 2022. The stock has not witnessed any significant gain or loss in the past year.

Telstra Corporation Ltd ASX

  1. The revenue of the company saw a decline of around 4.4%. The first half ended on December 31, 2021, and accumulated revenue is $10.5 billion.
  2. Net income of the first half of 2022 was approximately $0.7 billion, attributable to the company’s owners.
  3. The underlying earnings per share of the company’s first half of the fiscal year are 5.2 cents or 55% up.
  4. EBITDA was down 14.8% from $4.07 billion to $3.466 billion.
  5. For the financial year 2022, the firm declared on August 12, 2021, that it would return up to $1.35 billion in net earnings from the towers business deal to shareholders. During the first half of 2021, the corporation bought 142 million shares for $571 million. The repurchased shares were later cancelled.
  6. TLS values at A$3.9 in the current market and is down more than 4% compared to yesterday’s closing price of A$4.07.
  7. The current market cap of Telstra Corporation Ltd (ASX: TLS) is approximately 45.82 billion AUD.

Dividend update

Telstra’s investors now get two payments every year: interim and final dividends. The Board of Directors of Telstra Corporation Limited decided to pay an interim dividend of 8 cents per ordinary share on February 17, 2022. The interim dividend is fully franked at 30% tax. Payable on April 1, 2022; the record date is March 3, 2022. On March 2, 2022, stocks will cease to be dividend-paying. The DRP will be in place for the 2022 interim dividend. A vote in the DRP is required before March 4, 2022. As of December 31, 2021, the Board has neither determined nor publicly suggested an interim dividend for the fiscal year 2022. As a result, the dividend is not reflected in the financial statements. The interim dividend had been provisioned for $940 million as of the resolution date.

Major Acquisitions

The company paid $363 million for Clinical Technology Holdings Pty Ltd and its subsidiary Medical Director on August 16, 2021.

The company also finalized the purchase of 70% of Power Solutions Holdings Pty Ltd and its subsidiaries on November 9, 2021. In addition, Power Health must meet specific financial targets over the first two years, and the remaining 30% shares must be bought out between years two and five from completion or otherwise acquired by year five.

On November 12, 2021, The Company also purchased 100% of Fone Zone Pty Ltd and its related subsidiaries (Fone Zone) for $106 million in cash.

2022 Outlook

Telstra did not comment on the second half of fiscal 2022, although the company has reiterated all of its FY 2022 forecasts. The company expects an underlying EBITDA of around $7.3 billion and free cash flow after lease liabilities of $3.5-3.9 billion for the entire year are included in this estimate.

Our suggestion

Telstra Corporation Ltd.’s growth rate is not that significant at the moment. The stock also did not see any substantial change in the value. Even though TLS saw an increase of 18% in the trailing twelve months, the stock is amongst the best candidates for investors looking for a long-term investment.

 

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