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SYDNEY - Australian telco giant Telstra has reported a near three per cent lift in annual profit and says it expects earnings in the first half of this year to be slightly negative.
Net profit was A$3.275 billion ($3.7 billion) for the year ended June 30, up 2.9 per cent from A$3.183 billion in 2005/06.
Chief executive Sol Trujillo said he expects earnings before interest, tax, depreciation and amortisation (EBITDA) in the first half of 2007/08 to be slightly negative.
But the company is projecting full year EBITDA growth of two to three per cent and earnings before interest and tax (EBIt) growth of three to five per cent.
Revenue growth in fiscal 2008 is expected to be between two and three per cent. Earnings are expected grow on the back of wins in the mobile, broadband, directory and tradition fixed line, or PSTN, markets.
The company said it had passed the cost peak of its transformation process.
The company was "still only 19 months into a five year transformation and continued to face significant challenges, but will meet them head on," Mr Trujillo said.
But Mr Trujillo highlighted EBIT growth of 42 per cent in the second half fiscal 2007, which surpassed guidance of a 37 per cent to 40 per cent increase.
"The favourable trends emerging in the first half strengthened in the second," he said.
"We have hit the accelerator and continued winning in competitive markets, delivering sales revenue and earnings growth ahead of guidance and market consensus."
Total revenue grew 3.9 per cent to A$24 billion, while total expenses increased 3.5 per cent to A$18.2 billion.
"We have restored positive earnings growth, as our strategy of simplification, integration and differentiation begins to translate into value for our customers and shareholders," Mr Trujillo said.
"With the transformation remaining on or ahead of plan on virtually all fronts, and the peak transformation spend year now behind us, we expect to continue improving financial and operational performance in fiscal 2008 and beyond."
During the year, mobile revenue rose 13.9 per cent to A$5.7 billion on the backed of customer growth and stronger average revenue per customer.
Fixed line, or PSTN, revenue fell 4.1 per cent to A$7.2 billion.
The company said highlights of the period included the growth of the company's third generation network, Next G, to more than two million subscribers.
The retail broadband business also gained a further two per cent of market share, reaching 47 per cent.
The company declared a fully franked final ordinary dividend of 14 cents per share, taking the full year dividend to 28 cents.
- AAP
