Telecom half year EDITDA down

NZPA

Friday 11th February 2011

Telecom is reporting a 0.5% fall in adjusted half year earnings before interest, tax, depreciation and amortisation to $868 million.

Adjusted revenue for the six months to the end of December was down 3.3% from a year earlier to $2.58 billion.

Adjusted expenses, at $1.72b, decreased by 4.7%, reflecting lower mobile cost of sales and ongoing efficiency improvements, the company said today.

Telecom chief executive Paul Reynolds said a continued strong focus on operational excellence and cost control had helped offset increased tax and ongoing regulatory impacts.

Telecom remained on track to deliver its full year earnings guidance and had improved the capital spending outlook, now expecting full year capex to be within the $950m -- $1b range for the financial year, down from $1b to $1.1b indicated previously.

The XT mobile network continued to grow strongly and Telecom now had more than one million customers on XT, representing around 45% of its total mobile base, and 71% of its mobile revenue, Reynolds said.

For the 2011 financial year, Telecom would target a payout ratio of 90% of adjusted net earnings. In accordance with that policy, a second quarter dividend of 3.5c per share was declared.

Telecom reported a bottom line net profit of $164m for the half year, down 32.2% from a year earlier, on revenue down 2.6% to $2.6b.

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