Tuesday, 03 September 2019 06:16

Telstra cuts FY20 income forecast by $400m due to NBN Co corporate plan Featured

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Telstra has informed the Australian Stock Exchange that it is revising downward by $400 million its FY20 income guidance following the release of the NBN Co's corporate plan for 2020-23 last week.

The telco said its previous FY20 guidance provided on 15 August was based on the NBN Co's corporate plan for 2019, assuming that the NBN rollout and migration in FY20 would be in line with that plan.

But the latest NBN Co corporate plan cut the number of premises forecast to be connected in FY20 by 500,000, from 2 million to 1.5 million.

"This change materially impacts the guidance Telstra provided on total income, underlying EBITDA and the amount of included in-year NBN headwind, net one-off DA receipts less NBN net cost to connect and free cashflow after operating lease payments," the Telstra statement said.

"This change has also led Telstra to update its FY20 cost reduction target from $660 million to $630 million. Telstra no longer anticipates FY20 being the year of peak NBN headwind and now estimates this will occur in FY21."

Under an agreement reached with the NBN Co, Telstra is paid for each customer who moves from its network to the NBN. Under the changed corporate plan, Telstra will receive $300 million less in NBN Co payments during FY20.

Telstra has revised its total income for FY20 from $25.7 billion to $27.7 billion to $25.3 billion to $27.3 billion, a drop of $400 million. Underlying EBITDA has been revised from $7.3 billion to $7.8 billion to $7.4 billion to $7.9 billion, an increase of $100 million.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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