By John Pigou and Ayushmann Ojha
(Reuters) – Australian telecoms major Telstra (OTC:) raised its earnings forecast for the 2025 financial year on Thursday, prompting investors to shrug off a 13% drop in annual profit and sending its shares to a six-month high.
Telstra has raised the lower end of its 2025 underlying earnings before interest, tax, depreciation and amortization (EBITDA) guidance range to A$8.5 billion-A$8.7 billion (US$5.63 billion-A$5.76 billion), from A$8.4 billion and A$8.7 billion previously.
The decision follows the company’s decision to increase prices on most mobile packages last month. The revised prices will come into effect from August 27 for postpaid monthly customers, while prepaid users will see an increase from October 22.
Financial broker UBS said the tighter minimum guidance helps Telstra support a dividend of 19 Australian cents per share in the 2025 financial year, up one cent from the previous year.
Telstra shares rose about 3% to A$3.985 after the announcement, their highest since Feb. 14, shrugging off a drop in profits caused by higher costs, particularly from a writedown of its fixed-line business and the layoff of up to 2,800 workers.
“We also faced challenges with higher than expected inflation and costs, which made it difficult for us to meet our cost reduction ambitions,” said CEO Vicki Brady.
The telecoms company’s net profit in the financial year ended June 30 was A$1.78 billion, down from A$2.05 billion the previous year.
Telstra’s earnings before interest, tax, depreciation and amortization rose 3.7% to A$8.2 billion, helped by a 9.2% increase in mobile revenue, helped by the addition of 560,000 new mobile customers. The company declared a final dividend of 9 cents per share.
(1 USD = 1.5101 AUD)
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