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

 

Interest Rates: Wheeler Hikes OCR To 3% On Inflationary Pressures, Eyes Kiwi

Reserve Bank governor Graeme Wheeler lifted the official cash rate for the second time in as many months, saying non-tradable inflationary pressures were "becoming apparent" in an economy that’s picking up pace and he's watching the impact of a strong kiwi dollar on import prices. More>>

ALSO:

Scoop Business: Equity Crowd Funding Carries Risks, High Failure Rate

Equity crowd funding, which became legal in New Zealand this month, comes with a high risk of failure based on figures showing existing forays into social capital have a success rate of less than 50 percent, one new entrant says. More>>

ALSO:

Scoop Business: NZ Migration Rises To 11-Year High In March

The country gained a seasonally adjusted 3,800 net new migrants in March, the most since February 2003, said Statistics New Zealand. A net 400 people left for Australia in March, down from 600 in February, according to seasonally adjusted figures. More>>

ALSO:

Hugh Pavletich: New Zealand’s Bubble Economy Is Vulnerable

The recent Forbes e-edition article by Jesse Colombo assesses the New Zealand economy “ 12 Reasons Why New Zealand's Economic Bubble Will End In Disaster ”, seems to have created quite a stir, creating extensive media coverage in New Zealand. More>>

ALSO:

Thursday Market Close: Genesis Debut Sparks Energy Rally

New Zealand stock rose after shares in the partially privatised Genesis Energy soared as much as 18 percent in its debut listing on the NZX, buoying other listed energy companies in the process. Meridian Energy, MightyRiverPower, Contact Energy and TrustPower paced gains. More>>

ALSO:

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news