Telstra reports 20.5 % fall in half-year profit

(Associated Press via Newsedge) Telstra reported that its half-yearly profit fell 20.5%, but predicted its full year performance will be better than expected.

In its first result since being released from government ownership last year, Telstra said its profit for the six months to December 31, 2006 fell to A$1.7 billion ($1.3 billion) from A$2.14 billion ($1.7 billion) in the same period last year.

But the company said it expects its full year earnings before interest and tax to rise 3% to 5%, up from a previous forecast of 2% to 4% growth.

It also raised full year revenue growth guidance to 2.5% to 3% from 2% to 2.5%.

'We are on or ahead of our transformation plan on all fronts,' Chief Executive Solomon Trujillo said.

'Our financial performance is ahead of guidance. We are winning where it matters, in 3G, broadband and digital online offerings,' he said.

Telstra's revenue rose 2% to A$11.6 billion ($9 billion), and the group, which competes with companies such as SingTel and Vodafone in Australia, declared an interim dividend of A$0.14 ($0.11) per share.

The result comes after the government sold down its stake November last year in a A$15.5 billion ($12 billion) sale of 4.25 billion shares. It transferred its remaining 17% in the telecommunications group into a separately-run fund set up to pay for government employee pensions.

© 2007 The Associated Press

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