Telstra today released its results for financial year 2021, showing it had reached an important turning point in its financial performance and outlook. The firm also announced it would return approximately 50 percent, or up to $1.35 billion, of net proceeds from its InfraCo Towers transaction to shareholders during FY22 via an on-market share buy-back.
On a reported basis Total Income decreased 11.6 per cent for the year to $23.1 billion. NPAT increased 3.4% to $1.9 billion. Reported EBITDA decreased 14.2% to $7.6 billion. After adjusting for lease accounting on a like-for-like basis, EBITDA decreased 11.5% to $7.4 billion. On a guidance basis Underlying EBITDA decreased 9.7% to $6.7 billion. Underlying EBITDA includes an in-year NBN headwind of around $650 million and an estimated $380 million financial impact from COVID.
Excluding the in-year NBN headwind, underlying EBITDA in the year declined by approximately $70 million. Basic earnings per share were 15.6 cents, up 2% year on year. Shareholders will receive a fully-franked final dividend of 8 cents per share, including an ordinary dividend of 5 cents, and a special dividend of 3 cents. This brings the total dividend for the year to 16 cents per share, returning approximately $1.9 billion to shareholders.
CEO Andrew Penn said the company’s investment in innovation, digitisation and networks, its commitment to improving customer experiences, and its disciplined approach to capital management and productivity meant that Telstra was in a strong position as it headed into FY22. 2021 was a really significant year for Telstra. We delivered results in line with guidance and we are seeing the focus and discipline on T22 pay off.”
Telstra today announced it would return approximately 50 percent, or up to $1.35 billion, of net proceeds from its InfraCo Towers transaction to shareholders during FY22 via an on-market share buy-back. CEO Andrew Penn said the transaction reinforced the view that Telstra’s infrastructure assets could deliver additional value for shareholders.
In June, Telstra announced a long-term strategic partnership with a consortium comprising the Future Fund, Commonwealth Superannuation Corporation and Sunsuper, who would acquire a 49 per cent interest in Telstra InfraCo Towers. The Towers business is the largest mobile tower infrastructure provider in Australia with approximately 8,200 towers. The transaction valued Telstra InfraCo Towers at $5.9 billion, representing an FY21 pro forma EV to EBITDA after leasing multiple of 28x. Net cash proceeds after transaction costs are expected to be $2.8 billion at completion. The transaction is on track to complete in the first quarter of FY22.
The on-market share buy-back will be conducted in the ordinary course of trading over 12 months. The exact amount and timing of the on-market buy-back will be dependent on market conditions, and Telstra may investigate other forms of return if required. The on-market buy-back will be within the ‘10/12’ limit permitted under the Corporations Act1. The remainder of the net proceeds from the InfraCo Towers transaction will be used for debt reduction to ensure Telstra maintains balance sheet strength and flexibility.
It was thus a brilliant day if you are a Telstra shareholder. TLS shares were upbeat today as the share price surged higher – setting another 52-week high for the TLS share price. Telstra share closed at $3.97 a share – 3.66% gain today.
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