TELSTRA has reiterated its full year financial guidance, and predicted a lift in customer numbers but a fall in earnings for its first half.
Chief executive David Thodey told Telstra's annual general meeting today the telco still expected earnings before interest, tax, depreciation and amortisation (EBITDA) to fall by a high single-digit percentage in 2010/11.
Revenue will be flat, while the customer base will increase, he said.
"I currently expect our half-year results will show higher customer numbers, a low double digit decline in EBITDA as a result of increased redundancy costs in the first half and a change in the recognition of revenue from the Sydney Yellow Pages from the first half to the second half," Mr Thodey said.
"The company remains strong and in an excellent position to capitalise on the emerging market opportunities," Mr Thodey said.
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Negotiations on the national broadband network (NBN) remain "critically important", Mr Thodey said, with the company keen to see talks progress as quickly as possible.
Chief financial officer John Stanhope said the timing of a resolution to the negotiations remains uncertain.
"But the first step is the continued work towards finalising the draft Definitive Agreements with NBN Co by Christmas," he said.
This required decisions by the Federal Government around the Universal Service Obligation and how and where the industry will connect to the NBN, Mr Stanhope said.
"Yesterday, the minister, Senator Stephen Conroy, indicated that the Government would be making these decisions in the coming weeks," he said.
It may take months for the legislation to pass through Parliament, but Telstra still expects to hold a meeting for shareholders to vote on the issue by mid-2011, Mr Stanhope said.
Chairman Catherine Livingstone told the meeting about 600 written questions had been submitted to the board ahead of the AGM, mainly addressing Telstra's strategy, its share price, remuneration, the board and the NBN.
"In the short-term we need to do more to protect shareholder value, because your board is very concerned by Telstra's undervalued share price," she said.
The share price has fallen to record lows due to the company's lack of growth in revenue and profits, the uncertainty surrounding the NBN, the sell-off of shares by the Future Fund, and a devaluation of incumbent telecom stocks globally, Ms Livingstone said.
"Your board is confident that Telstra has the right strategy and is resolute in ensuring its execution," she said.
Ms Livingstone also said the board remained committed to maintain its 28 cent fully-franked dividend for this and the next financial years.
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