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

 


TeamTalk bemoans subsidy to rivals, cuts annual guidance

TeamTalk bemoans subsidy to rivals, cuts annual earnings guidance on telco levy

Feb. 27 (BusinessDesk) - TeamTalk, which bought the rural telecommunications provider Farmside last year, has cut its annual earnings guidance, blaming the downgrade on the government-imposed levy to pay for servicing unprofitable customers in remote areas.

The Wellington-based company made a net profit of $1.7 million, or 7.2 cents per share, in the six months ended Dec. 31, from $5.4 million, or 23.3 cents, a year earlier. TeamTalk sales slipped 0.8 percent to $16.7 million from a year earlier.

Earnings before interest, tax, depreciation and amortisation were $5.1 million, including a $247,000 contribution from Farmside. TeamTalk now expects annual ebitda to fall short of last year's $8 million, which it previously expected to match. The company's shares fell 1.4 percent to $2.90 in trading today.

The downgrade comes after the company made a provision of $600,000 to cover the cost of the Telecommunications Development Levy - the replacement for old Telecommunications Service Obligation to cover the costs of non-commercially viable customers. TeamTalk now expects to fork out about $500,000 a year to cover the levy.

"The grandiose sounding Telecommunications Development Levy is in fact little more than a tax on the industry in order to subsidise the rural initiatives being undertaken by Vodafone and Chorus," TeamTalk said in a statement.

"We had initially thought that a number of niche services, such as is typically sold by our group, could be exempt from this levy, however it has recently been clarified that this is not the case," it said.

The company will also take a hit to its annual net profit due to one-off costs, including the amortisation of some intangible assets, from the Farmside acquisition.

TeamTalk is upbeat about the second half of the year, and still plans to pay annual dividends of 20 cents per share. The board declared an interim dividend of 10 cents, with a record date of April 19, payable on April 27.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Efficiency: Businesses And Households To Save From New Energy Plans

Minister of Energy and Resources Simon Bridges today announced three energy efficiency initiatives to improve business productivity, save money and reduce carbon emissions. More>>

ALSO:

Get More From Scoop

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