* Net profit jumps 14 pct to highest level in five years
* Hikes full-year dividend for first time in eight years
* Mobile revenue climbs 5 pct
(Recasts and adds CFO comment)
By Byron Kaye
SYDNEY, Aug 14 Telstra Corp Ltd,
Australia's largest telephone company, said it would buy back
A$1 billion ($930 million) in shares and also hiked its dividend
as full-year profits came in above forecasts.
Net profit jump 14 percent to its highest level in more than
five years led by growth in its mobile services division.
Revenue also expanded 3.5 percent after being mostly flat for
the past five years, hurt by a rise in mobile phone use that
drove households to dispense with landlines altogether.
Telstra said it expected revenue and EBITDA for the current
financial year to be flat because it would not include earnings
from Hong Kong mobile business CSL. Telstra sold its 76.4
percent stake in CSL in December.
Net profit was A$4.3 billion for the year to June 30,
beating a A$4.1 billion forecast from Reuters Starmine
SmartEstimates based on 11 analysts. Revenue rose to A$25.3
After lifting its interim dividend for the first time in
eight years earlier this year, Telstra raised its final dividend
by 7.1 percent to A$0.15 per share, taking its total dividends
for the year to A$0.295.
The share buyback was forecast by some analysts while others
had said the company would prefer to use proceeds from sales of
stakes in CSL and directories business Sensis to invest in new
"We have the flexibility to do both," Telstra Chief
Financial Officer Andy Penn told Reuters in a telephone
interview, noting the company's recent move to buy out other
shareholders in U.S. internet video provider Ooyala for $270
Telstra shares climbed 1.6 percent to $5.26, ahead of 0.3
percent gain for the benchmark index.
The company has recently returned to profit growth after
writing down assets and investing in internet businesses
Telstra has also benefited from the sale of its fixed-line
assets to the government for A$11 billion to form the basis of a
A$37.4 billion ($34.2 billion) National Broadband Network.
That network is enabling the former state-owned company to sell
more internet services to customers in hard to reach places.
For 2014, the company said mobile revenue grew 5.1 per cent
to A$9.7 billion as it took on 937,000 new customers in the
year. Revenue from fixed-line voice services fell 7.5 percent to
(1 US dollar = 1.0752 Australian dollar)
(Reporting by Byron Kaye and Jane Wardell; Editing by Edwina