Telstra has lifted its interim dividend after posting a jump in first-half profit but cautioned about rising costs and a smaller increase in full-year revenue.
Australia's biggest telecommunications company on Thursday reported net profit of $934 million for the six months to December 31, a 25.7 per cent increase from the previous year.
Total income for the half-year rose 6.4 per cent to $11.58 billion on the back of momentum from its mobiles business and the recent Digicel Pacific acquisition.
Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) climbed 11.4 per cent to $3.9b.
"We are a growing business with a lot to be excited about in our future, and our T25 strategy provides a clear road map to get us there," new CEO Vicki Brady told investors in a briefing.
"While our momentum is good, we are just at the start of our return to growth."
Telstra shares rose on the news and were trading 1.8 per cent higher at $4.22 by 1330 AEDT.
Revenue in Telstra's key mobiles business rose 9.5 per cent to $5.1 billion and remained the largest contributor to Telstra's earnings.
Chief financial officer Michael Ackland said the company gained tens of thousands of new customers as a result of last year's Optus data breach. The additions had now returned to normal levels, he added.
Telstra's fixed-line consumer and small business segment revenue was largely flat at $2.3 billion.
The telco's international revenue soared 51.5 per cent to $1.1b, on the back of the government-backed acquisition of Digicel Pacific last year. The segment now accounts for 10 per cent of the company's entire earnings base.
However, revenue for the enterprise business dropped 2.5 per cent to $1.8b, which it blamed on ongoing disruption from technology change and competition.
Ms Brady flagged inflationary pressures as a key challenge in the external environment. The biggest increases have been in labour and energy prices.
"While inflation is having an impact, we continue to have cost mitigants and revenue levers, and remain committed to our FY25 $500m cost out ambition," Ms Brady said.
The telco reaffirmed its full-year guidance, with EBITDA forecast between $7.8b and $8b.
However, full year revenue is now expected to be at the lower end of the $23b to $25b guidance range because mobile hardware and fixed-product revenues are lower than expected as customers buy cheaper handsets and hold onto them for longer.
"We expect Telstra's credit profile to remain strong and gross leverage to settle below 2x over the next 12 to 18 months despite the tough consumer and business environment," ratings agency Moody's said in a note after the results.
Telstra will pay a fully franked interim dividend of 8.5 cents a share, a 6.3 per cent improvement from a year ago.
