Telstra has once again pinned the National Broadband Network (NBN) as the cause of a drop in profitability, claiming it is responsible for AU$600 million in negative earnings before interest, tax, depreciation and amortisation (EBITDA). In its results released on Thursday, Telstra said the cost to it from the NBN was now AU$1.7 billion in total, and that it has only seen half of the impact. Overall for the company, revenue was down 3.6% to AU$27.8 billion compared to last year, EBITDA shrunk 21.7% to AU$8 billion, and net profit was cut by 40% to AU$2.1 billion. Excluding costs from job cutting, Telstra said its EBITDA was down 11.4% to AU$9.4 billion. “While the reported financial trends in FY19 were challenging, underlying trends are expected to improve over the course of FY20,” the company said. Telstra is forecasting revenue of AU$25.7 billion to AU$27.7 billion for next year, with EBITDA between AU$7.3 billion to AU$7.8 billion, restructuring costs of AU$300 million, and NBN one-off payments of between AU$1.6 billion to AU$2 billion, with the government-owned network to cut its EBITDA by between AU$800 million to AU$1 billion. Over recent weeks, NBN and Telstra have engaged in a round of finger pointing over which company is responsible for money disappearing from which company’s balance sheet. In July, NBN struck out at Telstra’s complaints that the connectivity virtual circuit (CVC) charge that NBN puts on bandwidth needed to be scrapped and wholesale prices to be cut by AU$20. Telstra CEO Andy Penn… [Read full story]
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