Economy

Telstra profit rises 13% as Sol Trujillo’s pay jumps to $13.4 million

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Telecommunication giant Telstra has posted a 13% increase in net profit to $3.73 billion for 2007-08 thanks to increasing sales of mobile phone and data services.

Telecommunication giant Telstra has posted a 13% increase in net profit to $3.73 billion for 2007-08 thanks to increasing sales of mobile phone and data services.

While the result was slightly below analysts’ expectations of a net profit of $3.78 billion, the company did upgrade its profit outlook for 2008-09. Telstra now expects revenue to increase 3% to 4% in 2008-09, with earnings before interest and tax set to rise 6% to 8%.

But while the company’s new forecasts for 2008-09 are stronger than earlier predictions, they are still below some analysts predictions of an 8.5% jump in EBIT, and Telstra’s shares fell around 3% to $4.36 in morning trade.

The star performer for Telstra was its retail broadband network, where revenue climbed a whopping 49% to $1.8 billion. Total retail broadband subscribers increased 35.9% to 3.3 million while average revenue per retail broadband user increased by 2.9% to $53.02.

Revenue from the company’s mobile division increased 12.3% to $5.5 billion thanks to take-up of Telstra’s 3G services, known as Next G. Average revenue per mobile user grew 7.8% to $49 per month.

“Our Next G network investment has accelerated mobile growth, delivering double-digit growth for the third consecutive half and continuing our standout performance as customers see the value of our superior mobile offerings,” chief executive Sol Trujillo said in a statement.

Trujillo says the company’s five-year transformation plan is one track. “Telstra’s turnaround continues to gain momentum on all fronts, with our fiscal year guidance met or exceeded for the third consecutive year.

“We have redefined our business by investing to create competitive advantages and this value differentiation strategy, underpinned by our customer-centric transformation, sets us apart.”

Trujillio’s remuneration increased from $11.8 million to $13.4 million, while deputy chief executive Greg Winn’s pay packet bulged from $5.7 million to $11.2 million.

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