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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Housing: English On Housing Affordability And The Economy

"Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle. And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed. The resulting excess supply could produce a price crash..." More>>


Sweet Health: Sugary Drinks Banned From Hospitals And Health Boards

All hospitals and DHBs are expected to kick sugary drinks out of their premises. University of Auckland researcher, Dr Gerhard Sundborn who also heads public health advocacy group “FIZZ”, says he welcomes the initiative. More>>


NASA: Evidence Of Liquid Water On Today's Mars

Using an imaging spectrometer on MRO, researchers detected signatures of hydrated minerals on slopes where mysterious streaks are seen on the Red Planet. These darkish streaks appear to ebb and flow over time. More>>


Bird Brains: Robins Can Just Be Generally Clever

Research from Victoria University of Wellington has revealed that birds may possess a ‘general intelligence’ similar to humans, with some individuals able to excel in multiple cognitive tests. More>>


Psa-V: Positive Result On Whangarei Kiwifruit Orchard

Kiwifruit Vine Health (KVH) has received a Psa-V positive test result on Hort16A and male vines on a kiwifruit orchard in Whangarei. This is the first confirmed case of Psa-V on an orchard in the Whangarei region. More>>

Regional Accents: Are Microbes The Key To Geographical Differences In Wine?

A new study of six of New Zealand’s major wine-growing regions has found that differences in flavour and aroma of wine from different areas may depend more on microbes than was previously thought. More>>


Science: AgResearch To Cut Science Staff In Areas Of 'Reduced Demand'

“We are therefore consulting with our staff from today on a proposal to reduce science staff in areas of shrinking demand. Combined with recruitment planned in areas of growing demand, this would mean a net reduction of 15 scientists and 41 technicians at AgResearch in the 2015/16 year." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news