Telecom New Zealand Q4 Profit Falls; Backs FY10 Adj. EBITDA View

8/21/2009 2:27 AM ET

(RTTNews) - Telecom Corp. Of New Zealand Ltd (NZT: News ) on Thursday reported lower profit in its fourth quarter, hurt by decline in revenues. Further, the company maintained its fiscal 2010 adjusted EBITDA forecast.

Fourth-quarter net earnings attributable to equity holders of the company was NZ$78 million or 4 cents per share, compared to NZ$176 million or 10 cents per share in the prior year quarter.

Adjusted net income for the quarter fell 60% to NZ$70 million or 4 cents per share from NZ$175 million or 10 cents per share a year earlier. Earnings before income tax in the quarter were NZ$104 million, lower than last year's NZ$231 million.

Operating revenues and other gains for the quarter declined to NZ$1.363 billion from NZ$1.459 billion in the year-ago quarter. Adjusted revenue dropped 7% to NZ$1.351 billion from NZ$1.459 billion a year ago.

In the quarter, adjusted earnings before interest, taxation depreciation and amortization, or EBITDA, declined 17% to NZ$406 million from last year's NZ$487 million.

For the fiscal year 2009, the company's net earnings attributable to shareholders fell to NZ$398 million or 22 cents per share from last year's NZ$710 million or 38 cents per share. Adjusted net earnings attributable to shareholders declined 32% to NZ$481 million or 26 cents per share from NZ$710 million or 38 cents per share a year ago.

Operating revenues and other gains were NZ$5.599 billion, lower than last year's NZ$5.673 billion. Adjusted revenues totaled NZ$5.587 billion, down 2% from NZ$5.673 billion a year ago. The decline in revenue was primarily driven by declines in Retail and AAPT which were offset by growth in Wholesale and International.

Paul Reynolds, Chief Executive Officer, stated, "This was a big year for Telecom in which we made significant operational and service improvements on a broad range of fronts. Telecom is getting it right as we invest and re-build with the aim of returning to earnings growth. We improved customer service and public perception, and made huge strides in improving our infrastructure, as exemplified by the successful launch of the XT Mobile Network and significant progress in the roll-out of fibre-to-the-node broadband. These world-class networks form impressive platforms on which to grow and to secure the long-term health of the business."

Further, Telecom New Zealand noted that the board of directors on Thursday approved the payment of a fourth quarter dividend of NZ$112 million for the year 2009, representing 6 cents per share.