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TelstraClear earnings growth stalls amid slower capital spending

Thursday 11th February 2010

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TelstraClear, who contributes 2.2% of parent Telstra Corporation’s revenue, posted no earnings growth in the first half as it wound down its capital expenditure.  

Total income, including trans-Tasman revenue from selling services to Telstra in Australia, was $348 million in the six months ended December 31, compared to $346 million a year earlier, the company said in a statement. Stripping out those activities, total income rose 0.9% to $334 million. The New Zealand arm contributed a A$10 million loss to Telstra, compared to an A$11 million loss a year earlier.  

Capital expenditure dropped 15% to $40 million after TelstraClear completed the upgrade of its billing platform and the build out of high-speed internet access through the unbundled local loop. In November, Telstra chief executive David Thodey shook up the structure of the Australian company, and announced the closer integration of the trans-Tasman businesses. 

Telstra’s shares dropped 1.9% to $4.20 on the NZX and were down 3.2% on the Australian stock exchange.  

The telecommunications company’s operating expenses rose 1.1% to $273 million through higher network costs, though this was offset by reduced labour costs and increased trans-Tasman efficiency.  The parent company’s net profit fell 3.6% to A$1.85 billion in the first half.  

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