Telstra has bucked declining consumer spending and decreased business confidence to post $5.5 billion in free cash flow after the company announced strong sales momentum has pushed the company beyond its growth expectations.

 

The telco announced its full year results, which showed that more than two million mobile customers in Australia and Hong Kong had signed on to its services.

 

CEO David Thodey praised the results as proof of the company’s improved customer satisfaction and quality of service. Mr Thodey announced his confidence that the company’s strong revenue growth would continue across the business in 2012.

 

“We have had one of our best ever years for customer growth, seen improvements in customer satisfaction and have already begun realising the financial benefits of our simplification programme.  Additionally, we have developed growth opportunities by making significant investments in cloud computing, implementing a digital strategy at Sensis, offering FOXTEL content across our T-Box® services and restructuring the Asian Reach network assets,” Mr Thodey said.

 

The reported results for the 12 months to June 2011 were:

  • Sales revenue increase of 0.7 per cent, or $170 million, to $24,983 million
  • Earnings before interest, tax, depreciation and amortization decline of 6.4 per cent, beating guidance outlines
  • Net Profit After Tax declined by 17.5 per cent to $3,250 million

 

Telstra posted the following increase to its customer base

  • 1.66 million new domestic mobile customers, including 645,000 new postpaid handheld and 914,000  new mobile broadband customers
  • 352,000 new mobile customers in Hong Kong
  • 158,000 new fixed broadband customers
  • 190,000 new T-Box® and 175 thousand T-Hub® services
  • 659,000 new customers on bundled multi-product plans, with the total bundled base now more than one million.

 

However, the optimistic report from Telstra’s sales were tempered by a disappointing result from its Sensis arm, which reported a 6.4 per cent drop in revenue to $1787 million. Telstra blamed the falling profitability on a sharp decline in Yellow Pages revenues as well as structural digital marketing reform within Sensis. The telco has expressed its confidence that Sensis will capitalise on emerging digital marketing opportunities in the small business market.

 

The postings come after Telstra announced the Structural Separation Undertaking (SSU) that will see the company roll out progressive disconnection of fixed voice and broadband services on Telstra’s copper and HFC networks, and subsequent migration of these services onto the NBN by 1 July 2018.

 

Shareholders will have an opportunity to vote on Telstra’s participation in the NBN at the company’s AGM on 18 October 2011.

 

“We are pleased to have reached these important milestones and look forward to providing shareholders with an Explanatory Memorandum which will outline the basis for the Board’s recommendation to shareholders,” Mr Thodey said.