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Goldman Sachs JBWere Breaking Commentary


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TLS TELSTRA 1H06 RESULT - FIRST TAKE
09/02/06 09:18 Raymond Tong

TLS; Telecommunication Services; TELSTRA 1H06 RESULT - FIRST TAKE

GSJBW Initial Thoughts

Profit result of $2,139m slightly below GSJBW ($2,195m) but above consensus ($2,000m). The Company has not changed their FY06 guidance. Dividend in line. However, despite the better than consensus result + no change to guidance, we DO NOT expect the market will take this result positively. This is largely due to acceleration in industry structure decline, borne out in Telstra's revenue trends. For example, fixed line revenue -7.6% on pcp (an acceleration on the decline in 2H05 of -5.1%); mobile revenue +3.5% (vs F.3005 of +8.3%, as mobile caps take hold).

Result Metrics

* Sales revenue: revenues +1.5% to $11,439m vs GSJBW $11,466m and consensus $11,400m.

* EBITDA: -4.3% to $5,299m vs GSJBW $5,309m and consensus $5,200m.

* EBIT: -5.4% $3,489m vs GSJBW $3,451m and consensus $3,250m.

* NPAT: -8.5% $2,139m vs GSJBW $2,195m and consensus $2,000m.

* DPS: interim 14¢ + special 6c (in line with GSJBW and consensus).

Business Segment revenues

* PSTN: -7.6% on pcp to $3,672m (in line with GSJBW, $3,677m).

* Mobiles: +3.5% to $2,167m (lower than GSJBW $2,188m).

* Internet and IP: +42.3% to $888m (lower than GSJBW $905m).