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

 

Vodafone to spend twice as much on restructuring this year

Vodafone NZ to spend twice as much on restructuring this year


By Paul McBeth

Sept. 4 (BusinessDesk) - Vodafone New Zealand will spend twice as much on restructuring in the current financial year as its new owners accelerate plans to strip out costs.

The country's biggest mobile carrier spent $10 million as part of an organisational restructuring that included disestablishing jobs in New Zealand in the year ended March 31. It expects to spend another $20.8 million in the current year, its financial statements show.

That restructuring bill helped push up Vodafone's labour costs to $278.3 million in the March year, from $263.9 million the year before, but it's not commenting on the savings achieved or future savings expected.

Infratil noted the cost transformation programme as generating significant savings and delivering results when it announced its acquisition of Vodafone in May.

The company filed its last accounts to the Companies Office under Vodafone Plc ownership. Infratil and Brookfield Asset Management completed the $3.4 billion purchase on July 31.

The accounts show Vodafone reported a profit attributable to shareholders of $21.3 million in the March year, down from $40.4 million the year before. Revenue dipped 3.4 percent to $1.96 billion, of which service revenue was down 7.9 percent at $1.63 billion. Revenue from devices climbed 26 percent to $296 million.

A Vodafone spokesman said half the $139.1 million decline in service revenue was due to changes in the way new accounting standards treat revenue.

"Increased competition in both broadband and prepay have been a challenge to our customer base," he said. Phasing out legacy fixed-line products such as multiple phone lines, answering services and mail hosting added to the pressure on average revenue per user and pushed down annual revenue.

Earnings before interest, tax, depreciation and amortisation fell to $361.3 million from $403 million.

The company affirmed to BusinessDesk guidance for revenue of $2-2.1 billion in the March 2020 year and underlying earnings - adjusted for separation and transaction costs - of $460-490 million.

Vodafone's group accounts show the New Zealand carrier had 2.55 million mobile customers as at March 31, down from 2.56 million a year earlier. Since then, that's dipped to 2.54 million. However, over that time, its proportion of contract customers increased to 44.5 percent at June 30, from 43.5 percent in March and 41.3 percent in March 2018.

Broadband customer numbers have also been shrinking, falling to 424,000 as at March 31 from 426,000 a year earlier. Since then, Vodafone's broadband customers have dropped to 418,000.

Vodafone this week announced plans to link up with Kogan Mobile to offer budget mobile prepay plans to rival those of Two Degrees Mobile and Spark New Zealand's Skinny brand.

Infratil has indicated it wants Vodafone free to pursue a New Zealand-centric strategy, but doesn't need new income streams to hit its business case. Vodafone is keen to pursue a fixed wireless broadband strategy, much like Spark has, in a bid to reduce its wholesale costs to access networks owned by third parties. 5G mobile is seen as another way to achieve even bigger savings.

Vodafone's interconnect and access costs already shrank 4.7 percent in the March year to $369.8 million.

Device costs fell to $341.9 million from $366.4 million, as increased uptake of interest-free offers for handsets meant the telco was providing smaller subsidies.

That also underpinned an increase in trade receivables to $253.3 million from $181.7 million a year earlier. In the March 2018 year, Vodafone also sold $36.5 million of trade receivables to a related party.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Energy Sector: Meridian Spilled Water To Hike Electricity Prices - Authority Ruling

The Electricity Authority has found that generator Meridian Energy manipulated the power market, costing consumers about $80 million. More>>

ALSO:

XE Data Update: RBNZ Official Cash Rate Decision

The RBNZ will keep the Official Cash Rate (OCR) at 0.25%. T he key points in the RBNZ statement are: RBNZ keeps the OCR unchanged at 0.25% Maintain the LSAP (large scale asset purchase) at NZD$60 billion. Committee prepared to use additional monetary ... More>>

ALSO:

Electricity: Kiwis Ignore Promise Of Cheaper Power

Electric Kiwi and Flick Electric Co are joint winners of Canstar Blue’s award for Most Satisfied Customers | Electricity Providers From putting on an extra layer – rather than turning on a heater – to turning off lights and choosing the energy-saving ... More>>

ALSO:

Economy: COVID-19 Contributes To 1.6 Percent Fall In March Quarter GDP

Gross domestic product (GDP) fell 1.6 percent in the March 2020 quarter, the largest drop in 29 years, as the initial effects of COVID-19 restrictions impacted on economic activity, Stats NZ said today. This quarter’s GDP results showed a widespread drop ... More>>

ALSO:


Electricity: Transmission Pricing For A Low Carbon Future

The Electricity Authority has decided on new guidelines for transmission pricing. James Stevenson-Wallace, Chief Executive of the Electricity Authority says the new guidelines will deliver significant benefits to consumers, through lower electricity ... More>>

ALSO:

ASB: Investor Confidence Falls To Four-Year Low

As the world grapples with the fallout from the most significant pandemic the world has seen in a century, economic concerns are weighing on investors, dragging investor confidence down to a four-year low in the first quarter of the year. For the three ... More>>

ALSO:

Science Media Centre: Funding For R&D In New Zealand – Expert Reaction

Research, Science and Innovation Minister Dr Megan Woods has today announced $401.3 million funding for research and development through Budget 2020 and the COVID Response and Recovery Fund. The fund includes $150 million for an R&D loan scheme, ... More>>

ALSO:


Science: 2019 Prime Minister’s Science Prizes Announced

The 2019 Prime Minister’s Science Prizes have been announced in a digital livestream event today. The Prizes recognise the impact of science on New Zealanders’ lives, celebrate the achievements of current scientists and encourage scientists of the ... More>>

ALSO:


RNZ: Fuel, Alcohol Costs To Go Up From Today

The increase today in the taxes on fuel, road user charges and alcohol is being called a tone-deaf move. More>>

ALSO:

Stardome Observatory: Young Kiwi Astro-Photographer Shoots For The Stars

Matariki by Josh Kirkley. The stars are aligning for up-and-coming Auckland-based astro-photographer Josh Kirkley (Kāi Tahu). During lockdown, one of his images was picked up by NASA and shared on the space agency’s Instagram to its 59.2 million ... More>>


DCANZ: Time For EU To Commit To A Level Playing Field For Trade

The Dairy Companies Association of New Zealand (DCANZ) has welcomed New Zealand Trade Minister David Parker’s statement that it is unacceptable for New Zealand exporters to continue facing an ‘unlevel playing field’ in the EU. Details leaked ... More>>

ALSO:

Potatoes New Zealand: Protecting NZ Fries As Part Of PNZ Pandemic Recovery & Transformation Plan

Potatoes New Zealand has met with Minister Faafoi this week to discuss investigating the potential importation of heavily discounted frozen potato chips into New Zealand. With MBIE’s support we are undertaking an investigation to gather evidence of the ... More>>

ALSO:


New Zealand Government: Supporting Kiwi Businesses To Resolve Rent Disputes

The Government will legislate to ensure businesses that suffered as a result of the COVID-19 response will get help to resolve disputes over commercial rent issues, Justice Minister Andrew Little announced today. More>>

ALSO:


Science Media Centre: Understanding 5G Concerns – Expert Q&A


Recent attacks on cell phone towers have brought concerns over the rollout of 5G technology into sharp relief.
While scientific research has consistently shown that the technology does not adversely affect human health, public concerns about its impact have spread around the world, fueled in part by growing misinformation online. The SMC asked experts to comment... More>>

ALSO:


Trade: Record Monthly Surplus As Imports Dive

Imports in April 2020 had their biggest fall since October 2009, resulting in a monthly trade surplus of $1.3 billion, Stats NZ said today. “This is the largest monthly trade surplus on record and the annual goods trade deficit is the lowest ... More>>

ALSO: