Telecom New Zealand net profits slump 21%

20 Aug 2010

Telecom New Zealand has announced operating revenues of NZD5.27 billion (USD3.74 billion) for the fiscal year ended 30 June. This figure represents a 6.3% drop from the NZD5.63 billion recorded in 2009, reflecting continued competition and ongoing price pressure in the legacy fixed line businesses. Net earnings slumped to NZD382 million, down 20.9% from NZD483 million a year earlier. EBITDA slipped 0.2% to NZD 1.76 billion.

Mobile revenues increased by 0.5% from NZD822 million to NZD826 million, while data revenues slipped from NZD652 million to NZD642 million, a drop of 1.5% year-on-year. Broadband and internet revenues dropped 1.4% to NZD574 million, down from NZD582 million one year earlier. Local fixed telephony revenue fell 11.8% from NZD2.29 billion to NZD2.02 billion. In operational terms, Telecom New Zealand ended the fiscal year with 712,000 customers on its new XT mobile network, up by 117,000 (20%) quarter-on-quarter. The total mobile subscriber base (including XT customers) was 2.17 million as at 30 June. Meanwhile Telecom Retail has 1.15 million local access lines in service at the same date, whilst the number of broadband connections stood at 579,000.

New Zealand Telecom CEO Paul Reynolds commented: ‘Telecom has halted the significant earnings decline of the previous two years and achieved notable improvements in the trajectory of each of its businesses. In a year of further recessionary and regulatory impacts, it is especially pleasing to have delivered strong growth in free cash flow of NZD126 million, or 28% – the first such growth since the regulatory shock of 2006. Our transformation and turnaround programme is on track.’

New Zealand, Spark New Zealand Group