TelstraClear in the black

By NZPA

Thursday 27th February 2003

Telecom rival TelstraClear posted a profit after tax of $89 million for the first half, an improvement on the loss of $107 million for the previous six months.

TelstraClear's earnings before interest, depreciation and amortisation of $57 million for the period ended December 2002 was also an improvement, up on the $19 million produced during the company's first six months of operation.

Revenue jumped to $325 million from $306 million for the previous period.

TelstraClear said revenue rose as a result of one-off payments from Telecom over the companies' interconnection agreement, and through signing on more customers.

The company said it was on track to meet forecasts of full year net profit by 2004/05, within three years of its launch in December 2001.

TelstraClear went through a large restructuring last year as it brought together the networks of TelstraSaturn and Clear Communications, shedding almost 500 employees.

TelstraClear chief executive Rosemary Howard said she was pleased with the result.

"We're making good progress in our underlying numbers although we've got a long way to go, and I think the important thing is that in the last six-month period we started to see the benefits of the regulatory reform in New Zealand ....

"I think it's important to note that Telstra and Austar would not have put the money in to acquire Clear without the Telecommunications Act coming, and it certainly is starting to give an environment in which challengers like ourselves can be confident," Ms Howard said.

TelstraClear now had the option of buying more services from Telecom under the Telecommunications Act, and was investing between $150 million and $175 million in its network in the current financial year.

The company was not going to face further restructuring, although it would implement small changes to match the market.

TelstraClear's net interest was up 23 percent to $432 million due to additional borrowing as part of TelstraClear's consolidation. However, underlying net interest was up 10.1 percent.

TelstraClear's 58.4 percent owner, Telstra, announced a 44 percent drop in profit for the same period, as mobile revenue growth slowed and a hefty writedown on its undersea cable joint venture hurt earnings.

Telstra, half-owned by the Australian government, posted a net profit for the six months of $A1.184 billion ($NZ1.3 billion), compared with $A2.098 billion previously.

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