Telstra has cut its full-year guidance for earnings and revenue, blaming the temporary suspension of the national broadband network HFC rollout by NBN Co for impacting its financials.
The telco giant has reduced its 2017/18 revenue estimate by $700 million, and is now forecasting full-year revenue to be between $27.6 billion and $29.5 billion.
Earnings are expected to be $600 million lower, and between $10.1 billion and $10.6 billion, Telstra said.
Telstra shares closed down one cent, or 0.3 per cent, at $3.42, with the confirmation on guidance by the company largely seen as in line with market expectations.
Earlier this week, the company tasked with building the NBN announced it will suspend the rollout of new hybrid coaxial-fibre (HFC) connections from December 11 - for six to nine months - so it can work on measures to make connecting and using the service better, and to improve its reliability.
This was expected to have a flow-through effect in delaying payments Telstra receives from NBN Co for connections using its network and had dragged the telco's shares to a more than five-year low of $3.34.
"With the addition of the delays from the NBN ceasing sale of the HFC (network) announced earlier this week, Telstra's outlook is now outside of the guidance range and has been updated accordingly," Telstra said in a statement to the ASX on Friday.
The most significant impact would be a delay in the proportion of one-off receipts to Telstra from NBN, while revenue recognition from Telstra's commercial works contracts with NBN will also be delayed, the telco giant said.
It expects this to be partially offset by lower NBN costs-to-connect, lower network payments to NBN and retained wholesale earnings.
It also expects the delay will be modestly financially positive over the full rollout due to the effects of a natural hedge, with NBN Co remaining committed to completing the network rollout by 2020.
Telstra expects a $200 million hit in FY18 to free cashflow, which is now forecast to be between $4.2 billion and $4.7 billion.
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