Telecom, which plans to carve itself in two to tap government funding for a national broadband network, wrote down the value of its aging copper lines by $257 million, more than halving the company's annual profit.
Net profit was $166 million, or 9 cents per share, in the 12 months ended June 30, compared to $382 million, or 20 cents a share, a year earlier, the Auckland-based company said in a statement. Sales slipped 2.8 per cent to $5.12 billion, in line with a Forsyth Barr forecast.
The company wrote down the value of its copper network as a result of winning a large chunk of the government's $1.35 billion fund to build an ultra-fast broadband network through most of the country.
That means some of Telecom's products which would have run on the traditional wires won't now be launched, leaving some copper assets "stranded," it said.
The country's biggest phone company continued to strip out costs from the business at a fast pace, reducing operating expenses by 5.8 per cent to $3.3 billion, excluding the impairment.