Tuesday, 15 September 2020 11:26

Telstra pays out more to shareholders than its net profit

Telstra pays out more to shareholders than its net profit Image by Alexsander-777 from Pixabay

In a somewhat surprising display of generosity, Telstra has paid out more as dividends to its shareholders compared to its net profit for the year 2019-20.

Andrew Penn, the chief executive of Australia's biggest telecommunications provider, told a shareholders' meeting on Tuesday that the company had paid out $1.9 billion to shareholders. The company recorded net profit after tax of $1.8 billion.

The meeting was told that Telstra had just crossed the midway point of its T22 strategy announced in June 2018, which calls for a net reduction of 8000 employees and contractors by 2022.

Two to four layers of management are to be reduced, with one in four executive and middle management roles to be axed.

Penn told Tuesday's meeting that the company's results, which were announced on 13 August, were in line with the guidance provided.

"We are well positioned as we pass the midway point of out T22 strategy," he said. "During COVID, we have supported our customers, our people, the economy and shareholders."

The dividend paid out stood at 16 cents per share, which took the total paid out to a figure a shade above what the company had earned as net profit.

Penn stressed that the key principles behind the T22 strategy were "more important than ever before", adding that the strategy was fundamental to the company's transformation and the success of its customers.

He said one of the priorities for FY21 was to extend the company's leadership in 5G and monetise the investment made in the network, which would include launching a targeted fixed wireless service.

Thus far, Telstra has taken second place in the commercialisation of 5G, with its rival Optus gaining headway, especially with its 5G home Internet which has been a success.

The meeting was also addressed by chief financial officer Vicky Brady.

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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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