Telstra Reports $1.2B Profit, Raises Dividend to 10.5 Cents

Robust Financial Performance

Telstra Group Limited has delivered a strong financial performance for the half-year ended 31 December 2025, reporting revenue of $11.845 billion, a modest increase of 0.3% compared to the previous corresponding period. Profit after tax rose 8.1% to $1.205 billion, reflecting growth across key business segments and effective cost management.

The company’s earnings per share increased to 9.9 cents, up 11% on the prior period, supported by disciplined capital management and operational efficiencies. Telstra’s EBITDA after leases (EBITDAaL), a key industry metric, grew 4.9% to $4.162 billion, while EBIT rose 9.2% to $2.016 billion.

Dividend and Capital Return

In light of the solid earnings growth, Telstra’s Board declared a partially franked interim dividend of 10.5 cents per share, representing a 10.5% increase on the prior year’s interim dividend. The dividend is 90.5% franked, balancing shareholder returns with franking credit availability. The dividend record date is 26 February 2026, with payment scheduled for 27 March 2026.

Complementing the dividend, Telstra announced an increase in its on-market share buy-back program from up to $1 billion to up to $1.25 billion for the 2026 financial year. During the half-year, the company repurchased approximately 130 million shares for $637 million at an average price of $4.90 per share, with these shares subsequently cancelled. The expanded buy-back underscores management’s confidence in the company’s financial strength and outlook.

Segment Highlights and Strategic Progress

Telstra’s Mobile segment continued to perform well, with service revenue growth of 5.6% driven by higher average revenue per user (ARPU) and increased customer numbers. Fixed Consumer and Small Business (C&SB) segment saw a slight decline in income but improved EBITDA due to cost efficiencies and growth in 5G fixed wireless services.

The InfraCo Fixed and Amplitel infrastructure businesses reported income growth, reflecting strong demand for network access and tower services. Meanwhile, the Enterprise segment is undergoing a reset, with income declines offset partially by cost reductions and portfolio management.

Telstra’s Connected Future 30 strategy remains central to its growth ambitions, focusing on connectivity expansion, digital innovation, and sustainable financial discipline. The company achieved positive operating leverage of 3.1 percentage points, driven by a 0.2% increase in underlying income and a 2.4% reduction in operating expenses.

Balance Sheet and Risk Management

Telstra’s balance sheet remains robust, with net assets of $15.7 billion and net debt increasing slightly to $16.8 billion, resulting in a gearing ratio of 51.6%. The company successfully issued €550 million and CHF 200 million bonds during the period to support its capital structure. Cash flow from operations increased by 14.7% to $3.6 billion, supporting ongoing investment and shareholder returns.

Management continues to monitor financial risks, including interest rate and foreign currency exposures, with hedging strategies in place. The company also assesses potential climate-related risks, incorporating adaptation strategies into its long-term planning, though no impairment indicators were identified for its telecommunications network assets.

Regulatory and Corporate Developments

Telstra disclosed ongoing regulatory investigations and reviews but reported no material penalties or compliance breaches during the period. The company also progressed portfolio rationalisation, including the disposal of non-core entities such as MTData Holdings and partial divestment of the Versent Group.

Looking ahead, Telstra aims to sustain earnings growth and capital returns while advancing its Connected Future 30 strategy, positioning itself as a key enabler of Australia’s digital future.