TelstraClear lifts earnings by 18 percent ahead of sale of Vodafone
TelstraClear, the New Zealand phone company that Telstra has agreed to sell to Vodafone, lifted full-year earnings by 18 percent before an impairment charge on the business.
Earnings before interest, tax, depreciation and amortisation climbed to A$99 million in the 12 months ended June 30, from $84 million a year earlier, according to Telstra's annual results, released to the ASX today. Sales fell 2.3 percent to A$502 million.
Vodafone last month agreed to buy TelstraClear, for $840 million, giving the British company a stronger base from which to challenge New Zealand's Telecom. Telstra has taken a A$130 million impairment charge against goodwill for TelstraClear prior to the sale, it confirmed today.
Sydney-based Telstra today posted a 5.4 percent gain in net profit to A$3.4 billion as sales edged up 1 percent to A$25.2 billion. It was the second consecutive year of revenue growth after sales tumbled 2.3 percent in 2010.
Chief executive David Thodey forecast growth in sales and earnings would continue in 2013 at a "low single digit" pace, with the dividend expected to be unchanged from 2012 at 28 cents a share.
Shares of Telstra last traded at A$3.97 on the ASX and have gained 22 percent this year. The stock is rated a 'hold' based on a Reuters poll of 18 analysts, with a price target of A$3.63.
Telstra's results showed a continuation of the trend of growing mobile sales and shrinking revenue from fixed-line services. Fixed revenue fell 6.1 percent to A$7.49 billion and mobile gained 8.5 percent to A$8.67 billion.
Telstra's fixed-line copper wires are being handed over to state-owned NBN Co as part of plans to roll out a national broadband network in Australia, in return for some A$11 billion.
Telstra's sale of TelstraClear is subject to regulatory approvals.
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