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Telecommunications giant, Telstra (ASX:TLS) delivered its 2020 financial results, here’s what you need to know now.

The 11th biggest company on the ASX reported results in line with its own guidance and market expectations.

Net profit after tax (NPAT) fell about 16% to $1.8 billion, as the government owned national broadband network (nbn) continued to eat into its earnings, while mobile revenues fell due to a drop in international roaming from COVID-19 restrictions.

Total revenue across the group fell 6% to $26.2 billion, with mobile revenue down 4.4% and fixed line revenues falling 12.1%. Stripping out $200 million in restructuring costs, Telstra’s underlying earnings known as EBITDA fell 9.7% to $7.4 billion, this was in line but at the bottom end of Telstra’s guidance, but in line with UBS expectations.

But for this financial year, FY21, earnings are expected to fall again to $6.5 billion to $7 billion, allowing for a $400 million drop in earnings from COVID-19 and a $700 million drop in earnings from nbn headwinds.

Telstra expects less roaming revenue and increased bad debts from defaulting customers.

Telstra maintained and declared a final dividend of 8 cents per share, that’s payable on the 24^th of September, which takes its total FY20 dividend to 16 cents.

As for this financial year, its dividend sustainability is indeed being questioned, however as Telstra moves past the drag of the nbn transition and remains on track to save $2.5 billion by 2022, if you add in the fact that it’s planning to increase mobile prices, that could generate the business $700 million in extra revenues by 2023.

But COVID-19 will definitely give it a bumpy road, Telstra’s shares TLS, its shares are up 17% from their COVID-19 bottom, but after the result came through their shares saw some selling due to the weaker outlook.

Telstra remains a UBS and Goldman Sachs buy with some brokers price targets ranging from $3.70 to $4.40.