Telecom New Zealand reported a 59% drop in half-year net profit for the six months to 31 December 2008 at NZD162 million (USD84 million), compared with NZD397 million last year. Second-quarter profit crashed down 92% after the company wrote down the value of its Australian operations by NZD68 million, and the recession in New Zealand probably reduced operating earnings by about NZD10 million in the quarter. Net income fell to NZD14 million in the three months ended 31 December from NZD172 million a year earlier. Second-quarter sales fell 2% to NZD1.39 billion. Earnings before interest, tax, depreciation and amortisation declined 8%.
The former state-owned monopoly has been ordered by the government to open up its network to competitors and split into three separate operating units. It competes in the mobile sector with Vodafone and has limited competition in the domestic fixed line and internet sectors from TelstraClear.