TelstraClear earnings fall 1.3%

TelstraClear earnings fall 1.3%, parent shares sink 8% on NZX

By Paul McBeth

Aug. 12 (BusinessDesk) – TelstraClear Ltd., the New Zealand unit of Telstra Corp., posted weaker annual earnings, mirroring the tough environment the Australian company faced across the Tasman.

Auckland-based TelstraClear had earnings before interest, taxation, depreciation and amortisation of $157 million in the year ended June 30, compared to $159 million a year ago. In Australian dollar terms, it was a 2.8% decline to A$105 million, or just 1% of the parent company’s underlying earnings.

Telstra shares sank 8% to $3.80 on the NZX, and had yet to trade on the ASX where they were last at A$3.25.

“Growth in the business market has been challenging and this had been offset by higher revenues from the consume segment,” the company said in its break-out segment on the New Zealand unit. The weaker operating expenses were “managed through tight cost control partially offset by an increase in bad and doubtful debts impacted by the slow economic climate.”

Parent company Telstra reported a 3.3% fall in full-year profit to A$3.94 billion, or 31.3 cents per share. Revenue fell 2.5% to A$24.9 billion, while underlying earnings dropped 0.8% to A$10.8 billion.

Australia’s biggest phone company said it expects to lift its customer base in 2011, though revenue will stay flat, and it forecasts a “single digit percentage decline” in EBITDA due to increased investments. It forecasts cashflow of between A$4.5 billion and $5 billion after capital expenditure.

New Zealand capital expenditure fell 6.5% to A$72 million last year as the firm unbundled 60 local loop exchanges.

(BusinessDesk)

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