Vodafone NZ dials up its first profit

By RICHARD BRADDELL

Vodafone New Zealand has reported its first operating profit - $78 million before interest and tax in the March year.

The aggressive successor to BellSouth has turned the corner after recording a $2 million Ebit (earnings before interest and tax) loss last year.

It has also signed its one millionth customer after hitting 990,000 customers at the end of last month.

More than 60 per cent of New Zealanders now use a cellphone when 1.3 million Telecom customers are taken into account.

Vodafone New Zealand signed 101,000 new customers in the June quarter, taking the lion's share of the 127,452 net additions for its Pacific group - which embraces Australia and Fiji.

The New Zealand division's strong growth overshadows its Australian counterpart whose $A98 million ($121.54 million) Ebit was unchanged on the previous year.

Vodafone NZ chief executive Grahame Maher said the Australian margins were tighter and customer sentiment had been dampened by the spectacular collapse of One. Tel.

Although no figure was disclosed for Vodafone NZ's bottomline profit, it was likely to be big because in the previous year it had a net loss of only $11.2 million, after tax and interest.

Interest costs in the NZ arm are not great because it is mainly financed by 550 million $1 redeemable preference shares issued to the parent firm, which carry no dividend or other profit participation rights.

But Mr Maher said the NZ operation would have to pay its way in the group and a $70 million operating profit could be eaten up by interest.

Former Vodafone NZ chief executive John Rohan becomes an executive director of the Vodafone Pacific companies. Mr Maher will become Vodafone Pacific's chief operating officer.