Sharechat Logo

Vodafone NZ FY profit tumbles on TelstraClear costs, change in revenue mix

Thursday 3rd October 2013

Text too small?

Vodafone New Zealand posted full-year profit that dropped by more than two thirds as it took on costs related to the acquisition of TelstraClear and increased the proportion of lower-margin fixed-line sales.

The country's biggest mobile phone operator reported a profit of $55.9 million in the 12 months ended March 31, from $175 million a year earlier. Revenue rose by $149 million, or 9.2 percent, to about $1.77 billion but was offset by a $136 million gain in cost of sales and $83.5 million increase in operating expenses.

"This reflects the change in revenue mix with an increase in lower margin fixed line revenues," a spokeswoman said. "The increase in op-ex was caused by the increase in staff and costs brought in with the TelstraClear acquisition."

Vodafone acquired fixed-line operator TelstraClear and its Clear Communications subsidiary for $860.9 million cash last October, expecting to slash back-office duplication, use TelstraClear's backhaul and transmission services, and cut its reliance on Chorus.

The combined businesses amalgamated as at March 31 and the performance of both the existing and acquired business "was in line with expectations in an increasingly competitive market," the company said. TelstraClear was renamed as Vodafone Fixed and the net assets were valued at $843.6 million.

Labour costs jumped to $233.6 million in the latest year from $158 million a year earlier while related party finance costs rose to $116 million from $97.4 million. Cost of sales climbed to $757 million from $621.8 million.

Vodafone New Zealand paid management fees and other charges of $48.3 million in the year to entities of its parent Vodafone Group, down from $56.6 million a year earlier.

According to the parent's second-quarter results, released in July, the New Zealand unit lifted mobile customers by 19,000 to 2.326 million as at June 30. The percentage of pre-paid customers fell to 64.4 percent from 66.7 percent at the end of the March quarter.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Senior Trust Retirement Village Listed Fund (NZX: SRF)
SkyCity Entertainment Group Limited (NZX: SKC) Change in Senior Managers
Fonterra Shareholders' Fund (NZX: FSF) Communication to Fonterra Farmers
Vector Limited (NZX: VCT) Operational Performance for the 6 Months Ended 31 December
Chorus Limited (NZX: CNU) Q2 FY21 Connections Update
Genesis Energy Limited (NZX: GNE) FY21 Q2 Performance Report
Synlait Milk Limited (NZX: SML) Increases Forecast Milk Price to $7.20 kgMS
Auckland International Airport Limited (NZX: AIA) November 2020 Monthly Traffic Update December 2020 Preview
Solution Dynamics Limited (NZX: SDL) CEO Update
Steel & Tube Holdings Limited (NZX: STU) Appoints CFO

IRG See IRG research reports