New Zealand's Telecom Corp falls on poor outlook

New Zealand's Telecom Corp slumped 8.53 percent Friday after predicting it would struggle for earnings in the current financial year.

While the country's largest telecoms firm booked a seemingly spectacular 600 percent rise in annual net profit, it said the figure was meaningless as the reporting period included a major demerger.

Telecom said adjusted net profit was up just 8.8 percent to NZ$422 million ($342 million) in the 12 months to June and forecast a "flat to low single digit decline" in earnings performance during the current financial year.

Acting chief executive Chris Quin insisted it was a "satisfactory" result in an increasingly competitive market.

"Core business such as domestic fixed line access, calling and data continue to decline and are partially offset by growth in mobile and broadband," he said in a statement.

Telecom split from its network arm Chorus late last year, agreeing to dilute its market dominance in return for the government awarding Chorus about 70 percent of contracts for a planned ultra-fast broadband network.

When the demerger took place, Chorus made a one-off cash payment of NZ$863 million to Telecom, helping its annual net profit soar to NZ$1.16 billion from NZ$166 million in the previous year.

Telecom said in a statement to the New Zealand stock exchange that the net profit figure was "not meaningful due to (the Chorus) demerger".

Under the deal, Telecom continued as a retail-focused business, selling fixed-line, mobile and broadband services to the public.

Chorus became a separately listed company, concentrating on building the new broadband network and supplying wholesale broadband to other companies that then sell services to the public.

Telecom said while earnings could decline during the current financial year it was preparing to compete aggressively to maintain its share of the broadband market.

Adjusted revenues slipped 8.9 percent to NZ$4.54 billion over the year.

Telecom shares ended down 8.53 percent at NZ$2.52.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Philippine, Vietnam troops play sports on disputed island
    Philippine, Vietnam troops play sports on disputed island

    Filipino and Vietnamese troops played football and tug-of-war on a disputed South China Sea island on Wednesday, officials said, closing ranks as their rival China ramps up construction of artificial islands. The games took place on Philippine-held Northeast Cay, just 2.7 kilometres (1.7 miles) from Southwest Cay which is controlled by Vietnam, where a similar contest was held last year. "It was a navy-to-navy confidence-building engagement," Vice Admiral Alexander Lopez, the Philippine …

  • ‘Inland areas could be exposed to tsunami-like waves’
    ‘Inland areas could be exposed to tsunami-like waves’

    While strong earthquakes cause tsunamis in coastal areas, the Philippine Institute of Volcanology and Seismology (Phivolcs) warned that inland areas could also be exposed to tsunami-like waves, or seiche, if located near or around bodies of water. In a recent earthquake awareness seminar in Muntinlupa, Phivolcs supervising science research specialist Joan Salcedo explained that a seiche is a large wave similar to a tsunami, triggered by strong ground shaking from an earthquake or volcanic …

  • China gives ‘gentle reminder’ to Phl, warns small nations
    China gives ‘gentle reminder’ to Phl, warns small nations

    China gave the Philippines a “gentle reminder” last Tuesday that Beijing will not bully small countries but warned these nations not to make trouble willfully and endlessly. “Here is a gentle reminder to the Philippines: China will not bully small countries, meanwhile, small countries shall not make trouble willfully and endlessly. The Chinese Foreign Ministry also said that China would continue to build other civilian facilities on relevant maritime features in the disputed Spratly Islands …

  • Back-channel diplomacy pushed for Phl-China dispute
    Back-channel diplomacy pushed for Phl-China dispute

    The Philippines should consider backchannel diplomacy to prevent its territorial dispute with China from deteriorating further, Sen. Ferdinand Marcos Jr. said yesterday. There are a lot of Filipino businessmen with businesses in China and they have friends and connections there. Let’s utilize that, ask them to talk to their friends on how we can resolve this matter peacefully,” Marcos said. …

  • Phl, Japan to deepen ties amid China sea claims
    Phl, Japan to deepen ties amid China sea claims

    Japan and the Philippines are set to bolster security ties when President Benigno Aquino visits Tokyo next week, the latest move by Prime Minister Shinzo Abe to beef up cooperation with Southeast Asian nations facing China’s growing naval ambitions. The two sides will likely agree to start talks on a framework for the transfer of defense equipment and technology and to discuss a possible pact on the status of Japanese military personnel visiting the Philippines to facilitate joint training and …

  • Phl, Vietnam troops play soccer on disputed isle
    Phl, Vietnam troops play soccer on disputed isle

    Vietnamese and Philippine troops played soccer and sang karaoke on a South China Sea island yesterday in a sign of the growing security ties between the two Southeast Asian nations most at odds with Beijing over the contested waterway. Cooperation has blossomed between Hanoi and Manila since they shelved decades of enmity over their competing claims in the Spratly archipelago to try to counter China, whose creation of artificial islands in the region will allow it to project power deep into …

  • Noy swears in 50 newly appointed AFP officers
    Noy swears in 50 newly appointed AFP officers

    President Aquino administered yesterday the oath taking of 50 newly appointed generals and officers of the Armed Forces of the Philippines (AFP) in a simple ceremony at the Rizal Hall of Malacañang Palace. …

  • Taiwan’s peace call on claimants of disputed territories welcomed
    Taiwan’s peace call on claimants of disputed territories welcomed

    The US on Tuesday welcomed Taiwan’s call on all claimants to disputed shoals, reefs, rocks and islets in the South China Sea and West Philippine Sea to exercise restraint, refrain from unilateral actions that could escalate tensions, as well as to respect international law as reflected in the United Nations Convention on the Law of the Sea. “With regard to the maritime claims and the claims to sovereignty over land features in the South China Sea, our position is that maritime claims must …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options