Telstra (ASX:TLS) increases its dividend for the first time in seven years

• Telstra (TLS) increases its dividend for the first time in seven years despite a revenue drop in FY22
• The telecom business has agreed to pay a final dividend of 8.5 cents, bringing the total for the year to 16.5 cents per share
• However, Telstra recorded a 4.7 per cent drop in its total income of $22 billion, with EBITDA dropping five per cent to $7.3 billion
• Telstra’s mobile business performed strongly, posting $700 million in EBTIDA growth — up 21.2 per cent on last year
• Company shares are up 0.37 per cent and trading at $4.03 at 12:34 pm

Telstra (TLS) has increased its dividend for the first time in seven years despite posting a revenue decrease over FY22.

The telecom business has agreed to pay a final dividend of 8.5 cents, bringing the total for the year to 16.5 cents per share. This included an increase in its ordinary dividend from 10 cents to 13.5 cents per share and will see around $1.9 billion returned to shareholders.

However, Telstra recorded a 4.7 per cent drop in its total income of $22 billion, with earnings before interest, tax, depreciation and amortisation (EBITDA) dropping five per cent to $7.3 billion.

The company reported a net profit after tax of $1.8 billion — a 4.6 per cent drop compared to the year before.

Telstra’s mobile business performed strongly, posting $700 million in EBTIDA growth, which is up 21.2 per cent on last year.

CEO Andy Penn said Telstra’s FY22 results were evidence of the transformation of the business as part of its T22 strategy.

“Our mobiles result was outstanding, Consumer & Small Business Fixed grew sequentially in the second half, Enterprise returned to growth and we started to realise the benefits of setting up our infrastructure assets as standalone InfraCo businesses,” Mr Penn said.

“We also continued to take cost out of the business, with underlying fixed costs down $454 million and total operating expenses down $906 million, or 5.8 per cent.”

Mr Penn said that the company was very different today and was “much better equipped to face the very exciting digital future”.

“What we could not have foreseen was COVID and the other seismic economic, political and social changes that have unfolded,” he said.

“While we are by no means immune, the transformational changes we made through T22 have prepared us well to manage through the uncertainty — we are a much simpler, more agile, more efficient, leaner, more customer-focused and more digitally-enabled business.”

TLS shares were up 0.37 per cent and trading at $4.03 at 12:34 pm.