Telstra Announces Record Half-Year Profits

SYDNEY (03/09/2000) - The strong growth of new technologies has boosted the half-year profits of telecommunications giant Telstra Corp. to a new record.

For the six months to Dec. 31 last year, Telstra made an after-tax profit of A$2.1 billion (US$1.28 billion) -- a 15.6 percent increase on the same period last year.

While the result was boosted by some one-off items, the revenue growth was driven largely by the company's "new age businesses", chiefly mobile phones, data, text and the Internet, the company said. For the first time, revenue from such non-traditional businesses reached 50 percent of total revenue.

The company has declared an increased interim dividend of A$0.08 per share, which will only be partially franked.

Although the result was a new half-year record, the market reaction was less than impressive. In afternoon trading, Telstra's share price was down approximately A$0.30 on this morning's opening price of A$8.50.

Hoping to boost that profit even more over the next six months, Telstra announced yesterday that it plans to merge its Business Solutions and Convergent Business (CB) units.

The current CB group managing director, Ted Pretty, will head the new unit which Telstra said would "improve product commercialisation, reduce cycle times and redundant effort, and help order priorities" to better meet consumers' needs.

It has been estimated that the company will axe between 10 and 20 percent of its 52,000 employees as part of the rationalization.

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