Telstra Group (TLS) H1 2026 earnings summary

Executive summary

• Delivered strong half-year earnings growth, with EBITDAAL up 4.9% and underlying EBITDAAL up 5.5%, supported by cost control, efficiency initiatives, and disciplined capital management aligned with the Connected Future 30 strategy.

• Interim dividend increased by 10.5% to 10.5cps (90.5% franked), and share buy-back raised to up to $1.25 billion for FY26.

• Strategic focus on digital infrastructure, AI, and customer experience, with 86% of consumer service interactions now digital and significant progress in digital migration.

• Portfolio optimization continued, including divestments and sales of Alliance Automation, MTData, and Versent group.

• Strategic NPS improved by 5 points, reflecting enhanced customer experience.

Financial highlights

• Total income grew 0.2% year-over-year to $11.8 billion; EBITDAAL up 4.9% to $4.16 billion; EBIT up 9.2% to $2.02 billion; NPAT up 8.1% to $1.2 billion; EPS up 11% to 9.9 cents.

• Cash EPS up 20% to 14.0cps; operating expenses reduced by 2.1%; BAU capex down 5% to $1.5 billion.

• Underlying ROIC at 8.9%, targeting 10% by 2030; operating cash flows less investing activities up 47.7% to $1.9 billion.

• Buy-back lifted to up to $1.25 billion; $637 million spent in 1H26; 2.6% of shares to be retired in calendar 2025.

• Impairment of London Hosting Centre ($23 million) and goodwill impairments for Versent ($9 million) and MTData ($2 million) recognized.

Outlook and guidance

• FY26 underlying EBITDAAL guidance tightened to $8.2–$8.4 billion; BAU capex $3.2–$3.5 billion; cash EBIT $4.55–$4.75 billion; strategic investment $0.3–$0.5 billion.

• Full-year cash EBIT guidance targets 5–10% annual growth; dividend payout ratios at 106% of EPS and 75% of cash EPS.

• Expect higher BAU CapEx in second half, with productivity and asset sales offsetting divestment impacts.

• Committed to mid-single-digit cash earnings growth and sustainable, growing dividends.

• Focus remains on core business cash flow growth, disciplined capital management, and portfolio optimization.