TelstraClear interim profit falls as expenses rise

Thursday 10th February 2011

TelstraClear's earnings in the six months to December 30 were hurt by a 5.9% rise in expenses, according to the results of parent Telstra Corp.

Excluding intercompany revenue, TelstraClear posted earnings before interest, tax, depreciation and amortisation of $51 million in the six months to December 31, down from $61 million in the same period a year before.

It reported a loss of $19 million at the earnings before interest and tax level, more than double the loss of $9 million a year earlier.

Total income of $340 million, was up 1.8% from the $334 million last year but operating expenses, excluding depreciation and amortisation, rose to $289 million from $273 million.

Telstra said the rise in operating expenses was due to increased labour costs due to one-off project costs associated with outsourcing a number of call centre activities which will provide financial benefits for future periods.

It also cited increased sales resources and increased promotion and advertising expenses. These were partially offset by a reduction in bad and doubtful debts of 7% as a result of tighter financial controls.

The company spent $36 million on capital expenditure in the period, down 10% on a year earlier.

Commenting on revenue, the company said a decline in business revenue in previous periods was arrested, while consumer revenue grew by 1%.

NZPA

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