Telecom affirms 2H guidance on cost cutting, cheaper finance 8 Jun 2012
- NZ dollar drops to 5-wk low vs. pound after upbeat UK employment report Business
- MARKET CLOSE NZ shares up, Genesis debut sparks energy rally Business
- Supreme Court decision protects ‘outstanding landscapes' Business
- NZ dollar heads for 0.8% weekly fall before RBNZ rate review Business
- Air NZ says claims withdrawn as other airlines settle in Oz Business
- AMP Capital selling kiwi dollar in expectation of decline Business
- BNZ’s new CEO Healy expects benefit from expanding economy Business
- Genesis Energy soars on debut, other gen-taliers rise Business
- ‘Chipper’ kiwis push up consumer confidence in April Business
- Genesis shares stag 17% at listing, first trade at $1.81 Business
Telecom, the biggest company on the NZX 50 Index, affirmed its second-half guidance, saying cost cutting and lower borrowing costs have helped keep earnings on track even as competitors chased market share.
Second-half earnings before interest, tax, depreciation and amortisation would be about $560 million, meeting the guidance it gave with its first-half results in February. Net profit in the second half would be “near the top end” of its $160 million-to-$190 million forecast, it said in a statement.
Today’s statement comes after Telstra this week said it is in talks about the possible sale of its TelstraClear unit in New Zealand to Vodafone, already Telecom’s biggest rival in the mobile market. A merger would create a more powerful rival for Telecom with fibre networks in major cities.
"Competitors have been very active with a variety of new offers, which has increased customer churn," Telecom acting chief executive Chris Quin. “Despite increased competition, our focus on reducing costs sees us on track to deliver EBITDA guidance as planned."
Among cost cutting measures, the company will delist its American depositary receipts from the New York Stock Exchange, effective July 19. The ADRs amount to 15 percent of Telecom’s listed shares and will be able to be traded on the over-the-counter market starting on July 10.
“We are leaving no stone unturned in our drive to reduce costs and complexity, and delisting from the NYSE is a logical step in this process,” chief financial officer Nick Olson said.
Telecom’s financing costs are lower than expected, which Olson said reflected additional finance lease income following the Chorus demerger in November. Capital expenditure in the second half would be near the top end of the company’s forecast range of $190 million to $220 million.
Shares of Telecom last traded at $2.50 and have slipped from $2.75 on May 10. The stock is rated a ‘hold’ based on a Reuters survey of 10 analysts, with a price target of $2.33.
Quin said Telecom has responded to rivals’ offers by increasing data caps on its broadband plans. In mobile “we are seeing continuing decline in our prepaid customer base prior to the expected shutdown of the CDMA network in July this year,” he said.
17 Apr 2014 News
New Zealand Government 15,000 fewer people dependent on benefits Social Development Minister Paula Bennett says the latest benefit ... more
16 Apr 2014 News
Science and Innovation Minister Steven Joyce and Food Safety Minister Nikki Kaye today announced that expressions of interest... more
17 Apr 2014 Business News
Article - BusinessDesk Air New Zealand says claims withdrawn as other airlines settle over cargo cartel, seeks costs April 17 ... more
17 Apr 2014 Business News
Genesis Energy soars on debut, leading fellow energy companies higher April 17 (BusinessDesk) – Shares in the partially... more
17 Apr 2014 Entertainment
The winner of the fourth annual Taite Music Prize 2013 is Lorde for her album ‘Pure Heroine’ released on Universal Music... more
15 Apr 2014 Lifestyle
New Zealand movie ‘3 Mile Limit’ has won Best Feature Film at both the North Hollywood and Charleston International Film... more
7 Apr 2014 Property
April 7 (BusinessDesk) – New Zealand property values increased at the slowest annual pace in six months in March as lower... more
28 Mar 2014 Migration
Citizens of Croatia aged between 18 and 30 will soon be eligible to apply for a New Zealand Working Holiday Visa, giving them the... more
16 Apr 2014 Travel & Tourism
Company linked to one of China’s richest women to spend $200 mln on Auckland hotel April 16 (BusinessDesk) – Fu... more
17 Apr 2014 Rugby
New Zealand No 10 is loving his sabbatical, including a trip to the Masters, however his only motive is to return fit and fresh for... more
17 Apr 2014 Sport
TOP SEEDS CONTINUE MARCH TO QUARTER FINALS AT SKYCITY NZ BADMINTON OPEN Top seeds dominated in this morning’s 3rd round... more
20 Apr 2014 Column
The holistic helper's guide to Wellness: Part Two To misquote Aristotle ‘We are what we repeatedly do, wellness then is... more
17 Apr 2014 Opinion
Reportedly, US drone operators refer to their kills as "bug splat” - mainly because when the carnage is viewed on their... more
17 Apr 2014 Appointments
April 17 (BusinessDesk) – Bank of New Zealand, the local unit of Australia’s third-biggest mortgage lender, named the... more
15 Apr 2014 Recruitment
The average annual wage is expected to increase by $7,500 to around $62,200 a year by 2018 if New Zealand achieves its ... more