Telstra affirms dividend, raises doubts on NBN deal value
Telstra expects its dividend payments to remain flat in the current financial year despite forecasting earnings and income growth.
Chairman Catherine Livingstone told shareholders at the telco's annual general meeting they would receive 28 cents per share in dividends in 2012-13, matching the previous year's payout.
"I can confirm it is the board's intention to pay a fully-franked dividend of 28 cents per share in fiscal 2013, subject to the normal approval process and there being no unexpected material events," she told the meeting in Melbourne.
Telstra shares were up 2 cents, or 0.5 per cent, at $3.96 in early trade.
The dividend would be "fully franked and we seek to increase it over time", Ms Livingstone said. Future dividends must fit in with a long-term capital framework.
The company had received about 300 written questions from shareholders before the meeting, most of which were about dividends, executive remuneration and call centres, Ms Livingstone said.
Chief executive David Thodey said Telstra remained well-positioned to post income and earnings growth in the low single-digit percentages in 2012-13.
Cashflow was also expected to be between $4.75 billion and $5.25 billion in the year, he said.
"We delivered on our commitments in 2012 and we plan to deliver again in 2013," Mr Thodey told the meeting.
New value for NBN deal?
Ms Livingstone also told shareholders that the $11 billion value of Telstra's deal with government-owned NBN Co was ''no longer relevant'', without explaining what the new benchmark should be.
"The $11 billion value was relevant at the point in time when the company was making decisions on whether to enter into the NBN agreements and it represents a post-tax net-present value figure of those cash flows, discounted to June 2010.
"However, with the negotiations hving concluded that June 2010 figure is no longer a relevant benchmark. What is relevant is the extent to which we take the various elements of the NBN negotiations and build them into our business and these of course will be reflected in our financial reporting and our guidance to the market going forward,'' Ms Livingstone said.
Telstra will receive money from NBN Co renting parts of its network and also a disconnection payment for every premise that is connected to a fibre link and disconnected from its Telstra-owned copper link.
Mr Thodey said Telstra was still building a large inter-city transit network that NBN Co will rent on a 30-year lease.
"I think that the NBN really will allow us to do things [in Australia] differently and so we are a great supporter,'' he added.
Call centre concerns
Earlier, Ms Livingstone addressed ongoing shareholder concern about Telstra's commitment to keeping jobs and call centres in Australia.
She revealed the board had visited Telstra's call centre in the Philippines to check the quality of staff and their work. However, the need for call centres and staff would continue to decline as more customers use online self-service to check their Telstra accounts.
"Looking ahead we believe the real challenge is to grow new areas of the business and create the jobs of the future. During the year in which call centre staff [numbers] fell, our employee numbers stayed almost exactly the same becuase we created almost 2000 new jobs during the year in fields as varied as web design, IT, network design and social media.''