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

 


Chorus 1H earnings meet estimates, UFB seen costing more

Chorus 1H earnings meet expectations, lifts forecast UFB cost by $300M

By Paul McBeth

Feb. 25 (BusinessDesk) - Chorus, the telecommunications network operator spun out by Telecom at the end of 2011, met analyst expectations for its first-half earnings, while raising the forecast cost of building a nationwide ultra-fast broadband network by $300 million.

Earnings before interest, tax, depreciation and amortisation of $331 million in the six months ended Dec. 31 were in line with the $332.5 million forecast by Forsyth Barr analyst Jeremy Simpson. The Wellington-based company posted a net profit of $84 million, or 22 cents per share, on sales of $525 million, compared to Simpson's expectations of $80.8 million and $516 million respectively.

The results don't have an easily comparable period, as Chorus was still under the Telecom umbrella until November 2011.

Chorus raised its expectations for the total UFB build to between $1.7 billion and $1.9 billion from a range of $1.4 billion and $1.6 billion, and flagged capital expenditure of $640 million to $690 million this financial year from previous guidance of $560 million to $610 million.

"While we have made progress and reduced deployment costs for about 90 percent of our ultra-fast broadband build areas, we did not anticipate the extreme costs in the remaining 10 percent of areas," chief executive Mark Ratcliffe said in a statement. "This is specifically because of the significant variability in regional compliance requirements and civil work that is driving up the cost per premises passed."

Chorus said the rate of its UFB rollout has been consistent with expectations, with building work completed for 88,590 premises as at Dec. 31, and it's on target to pass 149,00 premises by the end of June this year.

The board declared an interim dividend of 10 cents per share payable on April 12. The stock fell 1 percent to $3.04 on Friday.

Chorus is at loggerheads with Telecommunications Commissioner Stephen Gale, who surprised the Beehive by indicating he would probably impose sharp cuts to the regulated price of unbundled bitstream access services of the company's ageing copper lines.

That has since been put on ice by Communications Minister Amy Adams, who has brought forward a review of the law governing the sector. The government has provided Chorus with a $929 million subsidy to build the fibre network, and there was an implicit expectation the regulator would go easy on the network operator on its regulated business.

Adams' decision gave Chorus enough certainty to shore up its dividend guidance, and it expected to pay 2.5.5 cents per share in 2014, provided all things remain the same. The board will deliver longer term guidance once the government's review has been completed.

Chorus increased its number of total fixed line connections to 1.79 million as at Dec. 31 from 1.78 million six months earlier. Baseband copper connections fell to 1.56 million from 1.59 million, while unbundled copper local loop connections rose to 109,000 from 97,000. Fibre connections rose to 15,000 from 10,000 and UBA advanced to 72,000 from 50,000.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news