Telstra Reports Strong Profit Growth and Announces A$750M Buyback

Telstra (OTC: TLGPY), Australia's leading telecom provider, met expectations for its first-half profit, driven by its mobile segment, and announced a A$750 million ($475.88 million) share buyback. CEO Vicki Brady stated that the on-market buyback through 2025 aligns with the company's financial strategy, reflecting confidence in its future growth.

The announcement lifted Telstra shares by 3.3% to A$4.05, marking their highest level since January 31. The company reported a net profit of A$1.03 billion for the six months ending December 31, surpassing last year’s A$964 million and matching analyst estimates. Revenue from its consumer division, its largest profit source, rose 3.1% to A$5.53 billion as more users subscribed, boosting average revenue per user.

Telstra’s competitor, Optus, reported a 4% increase in third-quarter operating revenue, benefiting from higher postpaid plan prices and a growing prepaid customer base.

Telstra increased its interim dividend to 9.5 Australian cents per share, up from 9 cents last year. Analysts at Jefferies noted that the buyback and dividend hike indicate management’s confidence post-T25, the strategy launched in 2021 to expand 5G coverage and reduce costs.

With demand for data soaring, Telstra plans to invest A$800 million over the next four years to upgrade its mobile network. The company emphasized a shift toward more advanced connectivity solutions to meet evolving customer needs. It remains on track to cut core fixed costs by A$350 million by the fiscal year's end, reinforcing its commitment to long-term profitability and efficiency.

Telstra’s strong performance, strategic investments, and capital returns highlight its leadership in Australia's telecom sector, driving investor confidence and market growth.