Telecom affirms 2H guidance on cost cutting, cheaper finance 8 Jun 2012
- Bill English says NZ well placed to deal with Brexit turmoil Business
- MARKET CLOSE: NZ stocks rise along with global markets Business
- NZ dollar gains as Brexit-induced volatility eases Business
- Hellaby Holdings jumps 7% on sale of equipment group Business
- Christchurch convention centre build to proceed without PCNZ Business
- Minister welcomes insurance report News
- R&D grants stop companies gaming system to get tax credits Business
- FMA puts advisers on notice over replacement life insurance Business
- Top Kiwi Business Takes on New Code to Help NZ Cyclists Living
- Spark completes $200m upgrade of customer service platform 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.
26 Jun 2016 Opinion
Opinion - Alastair Thompson A democratic path forward to mandate a proper plan for #Brexit - a proposal. By Alastair ... more
24 Jun 2016 Business News
Article - BusinessDesk NZ stocks turn as UK referendum result keeps investors guessing By Paul McBeth June 24 (BusinessDesk) - New... more
27 Jun 2016 Arts
** WIN one of two copies of the novel - visit our Competitions page for more details ** JEAN BATTEN was born in New Zealand in 1909,... more
27 Jun 2016 Entertainment
Pioneers of New Zealand's electronica scene, Pitch Black are celebrating the impending anniversary of their inaugural... more
16 May 2016 Property
By Jonathan Underhill May 16 (BusinessDesk) - Kiwi Property Group, the country's biggest listed property investor by market value,... more
30 Mar 2016 Migration
British High Commissioner Jonathan Sinclair is defending changes to skilled migrant rules for Britain but suggests they won't affect... more
3 Jun 2016 Travel & Tourism
New Zealand Government Rt Hon John Key Prime MinisterMinister of Tourism 3 June 2016 More funding for the New Zealand... more
16 May 2016 NZ Tourism
Article - BusinessDesk Monday 16 May 2016 12:20 PM Jucy plans to expand pod-style hotel chain to Australia in 2017 By Fiona... more
26 Jun 2016 Rugby
14 Jun 2016 Opinion
Column - Gordon Campbell Gordon Campbell on our paltry refugee response and a brazen US rewrite of the TPP First published at... more
23 Jun 2016 Appointments
New Zealand Government Hon Murray McCully Minister of Foreign Affairs 23 June 2016 Media Statement New Ambassador to Belgium... more
10 Mar 2016 Recruitment
New Zealand Government Hon Michael Woodhouse Minister for Workplace Relations and Safety 10 March 2016 Zero-hour contracts gone, PPL... more