Telstra cost cutting program boosts profit

Telstra has announced a “solid” half-year result with an after-tax profit of almost $2.3 billion.

That was up 94 percent, or $1.1 billion, from the previous corresponding period in which the non-cash writedown of the company's investment in Reach occurred.

In a statement, CEO, Dr Ziggy Switkowski, said a strong focus on cost reduction had helped the telco achieve the reported net profit result.

Switkowski said he was pleased with the progress of the cost reduction program which saw total underlying expenses decline in the period by 1.8 percent to $7.1 billion. He said Telstra's program to take out up to $800 million of costs over two to three years was on target.

"Our core domestic CAPEX spend, which reduced to $1.3 billion for the half, and our cost reduction program have been carefully managed so as not to compromise service improvement nor investments in growth opportunities,” he said.

Telstra's mobile operations also had an encouraging half year of performance achieving nearly seven million services in operation and generating revenue growth of 6.4 per cent from $1,804 million to $1,919 million -- an increase of $115 million.