Telstra's headline numbers for the first half were all down after taking hits from COVID-19 and the NBN.
But investors overlooked the red ink and embraced its turnaround story, driving the stock 2.52% higher in Thursday trading.
The Australian operator announced a 2.2% decline in earnings to $A1.13 billion (US$890 million), with revenue off 10.4% at A$12.02 billion ($9.33 billion).
EBITDA sank 14.7%, a result of A$370 million ($287 million) in payments to NBN and the estimated A$170 million ($132 million) impact of the pandemic.
Excluding these factors, however, the company said underlying EBITDA was on target and that it had boosted free cash flow by 75% to A$2.67 billion ($2.07 billion).
Additionally, it had excised another 6.6% of fixed costs, worth A$201 million ($156 million), and forecast it would remove another A$200 million ($155 million) in the next financial year.
Investors in Australia's most widely held stock also would not have missed that the dividend remained at 8 cents a share.
They were no doubt also attracted by the value being unlocked through the planned sale of the mobile tower business.
CEO Andy Penn told a briefing Telstra was conducting due diligence on the tower unit with the aim of finding a buyer by year-end.
He said the company was at a "turning point" after grappling with the "financial headwinds" of the transfer of billions of dollars in assets to NBN Co for the past four years.
"We have started each of the last four years with our EBITDA going backwards," he said.
Now it was on track to meet more than 80% of targets in its cost reduction and digitization program, known as T22.
"After a decade of disruption with the creation of the NBN, and its rollout now declared complete, we can clearly see the path to underlying growth ahead."
In its flagship mobile business, Telstra has opened up a lead in 5G, with more than 750,000 customers and coverage of more than half of the population.
It had added 80,000 net new mobile customers despite raising prices, which Penn attributed to its effective differentiation.
Total mobile revenue had contracted by 12% as a result of the loss of roaming revenue and handset sales, but it had increased its EBITDA margin by three points sequentially.
However, Penn repeated his warning that the economics of the broadband industry, which depends on access to the NBN, were not sustainable.
"If NBN ARPUs continue to increase in line with the pricing structure, consumers will have to pay more."
He said if the current cost structure remained, by the second half of this decade wholesale prices will be higher than current prices.
"That's obviously not sustainable. It doesn't matter how much the operators reduce their costs, that's just obviously not going to be sustainable."
— Robert Clark, contributing editor, special to Light Reading