Telecom affirms 2H guidance on cost cutting, cheaper finance 8 Jun 2012
- NZ dollar heads for 0.9% weekly drop Business
- Dorchester closes oversubscribed $30M capital raise Business
- NZX says it doesn't know why shares have declined Business
- Sky TV to launch $20/month subscription ondemand service Business
- Cavalier shares drop 10% after profit warning Business
- MARKET CLOSE: NZX 50 rises to record, led by Sky TV on rugby Business
- Sky TV sees annual profit gain of up to 8.6% in 2015 Business
- Heartland NZ chief risk officer resigns Business
- DNZ revalues portfolio by $10.7 million Business
- DNZ revalues portfolio up by $10.7 million 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.
24 Oct 2014 News
Ottawa resident says shock turning to anger and hard questions being asked about how gunman got so far. A New Zealander in Ottawa was... more
24 Oct 2014 Business News
By Fiona Rotherham Oct. 24 (BusinessDesk) - Sky Network Television, the country's dominant pay-TV operator, will launch a new $20 a... more
24 Oct 2014 Food & Wine
Fresh from two consecutive MKR People's Choice Challenge wins, Neena and Belinda favour wholesome and earthy flavours and aim to... more
24 Oct 2014 Lifestyle
New Zealand comedians Guy Montgomery (Billy T winner, 7 Days) and Tim Batt (Radio Hauraki, 7 Days) have broken the world record... more
24 Oct 2014 Property
Aucklanders living in the ‘hottest suburbs’ could be the big losers, while businesses will come out winners Rate rises... more
15 Oct 2014 Property
The Resource Management Act needs to explicitly recognise the importance of New Zealanders’ access to more affordable housing... more
24 Oct 2014 Migration
New Zealand has been named the best place to raise a child in the Raising Children Abroad annual league table. According to the HSBC... more
24 Oct 2014 Travel & Tourism
Giving flyers an Unexpected Journey! Elijah Wood and Sir Peter Jackson star in 'epic' Hobbit themed Air New Zealand safety video Air... more
25 Oct 2014 Sport
The Black Sticks Women have won 1-0 against the USA, setting up a series decider in the final test tomorrow at the Trust House... more
24 Oct 2014 Rugby
Scotland coach Vern Cotter clears out old guard and makes Grant Gilchrist captain for November Test series No place for Barclay,... more
24 Oct 2014 Opinion
After all the delays and stonewalling, the St James finally looks to have a future, even if it’s not clear what it will be Let's... more
23 Oct 2014 Opinion
Gordon Campbell on the tokenism of New Zealand‘s role against Islamic State Was John Key born lucky or what? Political... more
24 Oct 2014 People
Veteran weathercaster Jim Hickey has announced his retirement today, saying is was a tough decision. "I feel like I'm subbing off at... more
24 Oct 2014 Recruitment
New Zealand paramedics are being poached by Britain's busiest ambulance service. Interviews were held in Auckland on Friday and... more