Profit down 28% at Telecom New Zealand

6 May 2008

Telecom New Zealand has reported a sharp drop in third-quarter net profit, with income hit by a one-off tax expense and continued poor performance at the company’s wireline business. Net profits for the three months to the end of March 2008 stood at NZD140 million (USD109 million), down from NZD195 million in the year-ago period if the figure is adjusted to take into account the sale of the telco’s Yellow Pages unit. The latest results include a NZD20 million one-time write-off of deferred tax. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 7.5% year-on-year to NZD469 million, while operating revenues climbed 2.1% to NZD1.39 billion. Revenues from fixed line voice calling were down 4.6% at NZD310 million and sales at the mobile unit dropped 5.9% to NZD207 million due to declining device sales and pressure on pricing. There was better news with broadband and data services, however, with revenues rising from NZD112 million to NZD137 million. Telecom had 1.77 million fixed telephony access lines in service at the end of March, only slightly down on the year-ago figure, while the number of broadband connections rose 26.4% to 714,000. The number of mobile subscribers rose from 1.94 million in March 2007 to almost 2.16 million a year later.

New Zealand, Spark New Zealand Group