Telecom New Zealand has returned to profit for the first time in five years, despite facing increased competition in the Australian market. For the full year ended 30 June 2003 total operating revenues fell 6.25% to NZD5.19 billion. The reduction was offset, however, by an almost 50% fall in costs to NZD2.88 billion; 2002 results were affected by a NZD850 million write down of goodwill and other assets at its Australian subsidiary AAPT. As a result EBITDA climbed 65% to NZD2.31 billion, allowing the company to report a profit of NZD709 million compared to a loss of NZD188 million in the previous year.
According to Tersa Gattung, helmswoman of the Wellington-based telco, her company has been successful in driving revenues in growth areas of its business, while at the same time maintaining tight discipline on cost, assisted by structural changes to the company’s operating model. Telecom’s mobile customer base fell by 56,000 during the course of the year to 1.25 million, in face of stronger competition from rival Vodafone New Zealand, while in Australia AAPT reported an 18% fall in revenues but managed to turn cashflow positive. Telecom’s gross debt fell during fiscal 2003 to NZD4.88 billion, or 2.11 times EBITDA; it hopes to lower the figure to two times EBITDA by December 2003.