Telstra says tough trading conditions to continue

SYDNEY - Telstra Corp Ltd says it expects the tough trading conditions it experienced in the first half of 2005/06 to continue.

The telco today reported a first half net profit of A$2.14 billion ($2.36 billion), down from A$2.39 billion in the previous corresponding period.

Directors have declared an interim dividend of A14 cents, in line with the previous interim dividend.

A special dividend of six cents will also be paid.

The company reiterated previous 2005/06 guidance, saying earnings before interest and tax (EBIT) would decline in the range of 15 to 20 per cent, without a year end restructuring and redundancy provision, and 21 to 26 per cent with such a provision.

"The recent deterioration in operating trends and our investment in transforming the business will see earnings fall in the near term," said chief executive Sol Trujillo.

"Consistent with our plan, we are taking some tough medicine now to bring the company to financial health and deliver sustainable growth in shareholder value over time."

Telstra said total income rose to A$11.578 billion, up from A$11.36 billion in the previous corresponding period.

- AAP