Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Telecom Reports Solid Underlying Performance

Telecom Reports Solid Underlying Performance For First Quarter

Telecom today reported a net profit of NZ$146 million for the three months ended 30 September 2002 – a decrease of 3.3% on reported net earnings of NZ$151 million for the three months ended 30 September 2001.

On an adjusted basis, net earnings for the three months ended 30 September 2002 increased 8.1% on the previous corresponding quarter^.

(^Unless otherwise stated, all comparisons are with the first quarter of the 2001-2002 financial year.)

Operating cash flow was NZ$458 million – a pleasing increase of 84.7% on the previous corresponding period.

Adjusted net earnings for the first quarter of the previous financial year were NZ$135 million, after making adjustments for gains associated with the prepayment of a cross-border lease, the sale of international network capacity, and a lower amortisation charge in the first quarter of the current financial year due to the writedown of the Group’s investment in AAPT on 30 June 2002.

EBITDA for the quarter ended 30 September 2002 was NZ$541 million, up 0.7% on the previous corresponding period. Overall operating revenues decreased by 7.1% while operating expenses were reduced by 12.0%. Excluding one-off gains from last year, EBITDA was 8.2% higher than in the previous corresponding period.

Telecom Chief Executive Theresa Gattung said the Group is maintaining a good operating performance in the current demanding environment.

“In New Zealand, we continue to generate strong operating cash flows and reap the benefits of an ongoing focus on cost reduction.

“Across the Tasman, our positive cash flow position* has been reinforced, during a period of structural change. We continue to focus on higher value customers and on negotiating better prices with suppliers.

(*EBITDA less capex)

“In keeping with our debt repayment objectives, the Group’s strong cash flow performance has enabled us to reduce net debt by NZ$116 million during the quarter.”

Business unit performance

New Zealand Wireline: New Zealand Wireline comprises fixed line and value-added services to residential, business and corporate markets.

Operating expenses were down 8.6%, reflecting a continued focus on cost containment. This, coupled with a modest decline in revenues, led to a 2.0% gain in EBITDA for the quarter to NZ$406 million.

Residential access lines grew 2.7% to 1,406,000 as at 30 September 2002 compared to a year ago.

Data revenue growth, driven by take-up of JetStream, Lanlink and frame relay circuits, was significant in consumer and business segments (120% and 9.8% respectively on the previous corresponding period) and relatively stable in the Corporate segment.

This encouraging data uptake, when combined with a 4.8% decline in wholesale data revenue, produced a 1.6% growth in data revenues over the previous corresponding period.

JetStream connections were more than 100% up on the corresponding period last year.

The ADSL rollout continues, with consumer JetStream customers growing at 1500 per month. A further 70 exchanges will be upgraded by March next year, which will extend coverage to 83% of Telecom customers.

New Zealand Mobile: This business provides voice and data on AMPS and CDMA networks.

EBITDA increased by 41.2% for the three months ended 30 September 2002. This is a reflection of revenue growth of 5.0% and a decrease in operating expenses of 9.3% as a result of lower cost of sales.

Total CDMA connections have now reached more than 200,000. Of these, 80% are post paid, of which 33% are new customers to Telecom.

In the less than three months since the fast data Mobile JetStream service has been available, more than 15,000 Mobile JetStream phones and cards have been sold.

International: International provides New Zealand and Australia with outward and inward calling, managed international data services and carries transit call traffic between destinations worldwide.

Revenue for the quarter ended 30 September 2002 decreased by 30.9% - largely a reflection of NZ$16 million of network capacity sales being recorded in the first quarter of the previous financial year, and the impact of the appreciating New Zealand dollar.

Operating expenses decreased by 21.6% due to renegotiated agreements with other carriers.

Internet and Directories: Internet and Directories comprises Xtra and Telecom Directories.

Revenues increased by 9.0% for the three months ended 30 September 2002, leading to EBITDA growth of 15.6% to NZ$37 million for the period.

The Xtra business continues to grow, with Internet revenue up 39.1%. At 30 September 2002, Xtra had 400,000 active dial up customers, up 29.4% on the previous corresponding period. These customers spend an average of 31.8 hours on the Internet a month, up 5.3% on 12 months ago.

Australian Consumer: Australian Consumer comprises AAPT’s residential and small business calling and resale business, and the ‘AAPT mobile’ operation, which was previously branded Cellular One.

Australian Consumer EBITDA improved by 200% to NZ$15 million for the three months ended 30 September 2002, compared with the corresponding period last year. Revenues were down 21.8% while operating expenses fell 26.5%.

Australian Business & Internet: Australian Business & Internet comprises AAPT’s operations in business, corporate and government markets, the Connect Internet business and TCNZA.

Australian Business & Internet EBITDA increased by 76.9% to NZ$23 million. While total operating revenue decreased by 5.0%, revenue grew across several categories including data and interconnect. Operating expenses fell by 10.1%, largely due to lower cost of sales.

Capital expenditure: Total capital expenditure for the first quarter of 2002-2003 was NZ$76 million, down 45.7% on the previous corresponding period in 2001-2002.

Telecom has revised its forecast of total capital expenditure for the 2002-2003 financial year to approximately $NZ730 million from its previous forecast of approximately $NZ780 million.

Dividend: Telecom will pay a fully-imputed quarterly dividend of NZ5.0 cents per share. Shares issued in lieu of cash dividends will be offered at a 3% discount to the price calculated under the Telecom Dividend Reinvestment Plan. Dividends will be paid on 13 December 2002 in New Zealand and Australia, and 20 December 2002 in the United States. The books closing dates are 29 November 2002 in New Zealand and Australia, and 28 November 2002 in the United States.

© Scoop Media

Business Headlines | Sci-Tech Headlines


Voluntary Administration: Renaissance Brewing Up For Sale

Renaissance Brewing, the first local company to raise capital through equity crowdfunding, is up for sale after cash flow woes and product management issues led to the appointment of voluntary administrators. More>>


Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>


Media Mega Merger: Full Steam Ahead For Appeal

New Zealand's two largest news publishers have confirmed they are committed to pursuing their appeal against the Commerce Commission's rejection of the proposal to merge their operations. More>>

Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>


Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>