Telstra's profit growth pleases investors

Telstra shares are higher after the telco lifted its first-half profit and said it was on track to achieve its full-year growth targets.

Telstra made a net profit of $1.6 billion in the six months to December 31, up almost nine per cent on $1.47 billion in the same period in the previous year.

The profit rise came on the back of strong growth in customer numbers, which helped push revenue up 1.5 per cent to $12.6 billion.

Telstra added 607,000 new mobile customers in the period to take its Australian customer base to 14.4 million, plus 321,000 new customers in Hong Kong.

The company's shares were up 4.5 cents, or one per cent, at $4.62 at 1120 AEDT.

"Telstra's first-half result was in line with expectations," Morningstar analyst Michael Wu said.

He said the result re-affirmed Morningstar's view that Telstra holds a slight competitive advantage over its rivals, delivering a narrow economic benefit.

"Our view is based on Telstra's dominant market position in the mobile and fixed broadband market and its low cost position," Mr Wu said.

Telstra chief executive David Thodey said the company was on track to meet its full-year financial targets of low single-digit growth in total income and earnings.

"We will continue to focus on improving customer satisfaction, growing customer numbers, simplifying the business and taking advantage of new growth opportunities," he said in a statement.

"We are making good progress but there is more to do."

Telstra's total income grew by 1.7 per cent in the six months to December to $12.7 billion, and earnings rose by five per cent to $4.99 billon.

The telco also expects to pay full-year dividends of 28 cents per share, and declared a fully-franked interim dividend of 14 cents.

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