Telstra churns its financial wheels

Renai LeMay
Thursday, 11 February 2010 08:14

IT Industry - Listed Tech

Telstra today unveiled a muted set of half-yearly financial results for the six months to December 31,, with revenue and earnings both slightly down, but free cash flow showing a spark spike upward.

According to statements issued to the Australian Securities Exchange this morning ahead of the company's results briefing in Sydney, Telstra's total revenue for the period sank 2.9 per cent compared with the same six months to the end of 2008. Total sales revenue was $12.34 billion.

Earnings before interest, depreciation, amortisation and taxation (EBITDA) were also down by 0.3 per cent to $5.32 billion, although once the sales of the company's IT services business KAZ to Fujitsu last year was taken out of the equation along with currency movements, EBITDA looked a little better, 0.2 per cent up.

But the real winner in the results was Telstra's free cash flow, which jumped from $1.91 billion in the half to the end of 2008 to $2.62 billion at the end of 2009 - a figure 37 per cent up.

The company said it was experiencing 'challenging market conditions', with revenue from its traditional fixed-line telephony business (the public switched telephony network or PSTN) dropping by $222 million compared with the previous corresponding period.

The 'PSTN headwinds have increased,' the company said in its management presentation. Revenue from advertising and Telstra's directories business (contained within Sensis) was also down by $53 million.