Telecom second quarter profit $198m

Telecom Corp today reported a second quarter profit of $198 million -- higher than analysts' forecasts but lower than the same period the previous year.

New Zealand's largest listed company said its net profit was $391 million for the six months to December 31, up from $365m for the same period last year. The telco posted a first quarter profit of $193m in November.

Analysts forecasts for Telecom profit for the period had ranged from $188m-$193m.

Telecom racked up a $203 million for the same period last year but that was boosted by a $28 million one off gain.

Telecom also said it would pay a 9.5c per share fully imputed dividend for the quarter.

Chief executive Theresa Gattung said the result was driven by strong revenue growth in mobile, broadband and IT services. "It was encouraging to see very strong growth performance in all of these areas in the December quarter," Ms Gattung said in a statement.

Telecom also benefited from lower net interest due to reduced debt levels and lower depreciation.

The company said its operating revenue for the quarter was $1.41 billion -- up 3.9 per cent on the same quarter a year earlier,. Earnings before interest, tax, depreciation and amortisation were $556m -- 5.8 per cent down on the same period last year.

Expenses were up 11.4 per cent at $850m.

Earnings per share at 10.1c were down 4.7 per cent.

The company's New Zealand operating revenue was up strongly for the quarter, rising 9.7 per cent to $1.06 billion. But New Zealand expenses rose at a higher rate and were up 23.3 per cent to $534m.

The company said the quarter continued to reflect its transition from traditional voice services to newer technologies. Higher New Zealand revenues in the mobile, data, internet and interconnection sectors were partly offset by declines in calling and local service revenue.

Ms Gattung said Telecom, which is fighting to for market share in the mobile market with Vodafone, had enjoyed one of its strongest quarters of growth in that sector with 96,000 net new connections over the three month period.

The company also experienced record growth in broadband internet connections and was "very well placed" to achieve its target of 250,000 residential broadband customers by the end of December 2005.

- NZPA