Telstra has slashed its dividend by more than a quarter to 11 cents a share for the December half in a blow to about 1 million investors, many of them mum and dad shareholders and self-funded retirees.
The dividend cut, flagged in August last year, came as the telco reported a 5.8 per cent fall in net profit to $1.7 billion, despite reporting a decline in fixed costs and an increase of subscribers on mobile and fixed connections.
The profit decline was largely due to a $273 million non-cash impairment of its US video arm Ooyala. Without this impairment charge, profit would have increased 9.5 per cent to $2 billion, Telstra said.
The fully franked dividend - interim ordinary dividend of 7.5 cents a share and an interim special dividend of 3.5 cents a share - will be paid to shareholders on March 29 at a total value of $1.3 billion.
In August, Telstra announced a "material" reduction in its long-term dividend policy - the first big change since its 1997 float - causing its share price to fall to the lowest point in five years.
Its dividend policy for financial year 2018 is to pay an ordinary dividend of 70 to 90 per cent of underlying earnings.
Telstra chairman John Mullen previously described the change of policy to stop paying out all profits as dividend as one of the "toughest decisions" the board ever had to make. Analysts at the time said it was a "positive" move that would help Telstra re-invest in its core business
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