Vodafone New Zealand posted full-year profit that dropped by more than two thirds as it took on costs related to the acquisition of TelstraClear and increased the proportion of lower-margin fixed-line sales.
The country's biggest mobile phone operator reported a profit of $55.9 million in the 12 months ended March 31, from $175 million a year earlier. Revenue rose by $149 million, or 9.2 per cent, to about $1.77 billion but was offset by a $136 million gain in cost of sales and $83.5 million increase in operating expenses.
"This reflects the change in revenue mix with an increase in lower margin fixed line revenues," a spokeswoman said. "The increase in op-ex was caused by the increase in staff and costs brought in with the TelstraClear acquisition."
Vodafone acquired fixed-line operator TelstraClear and its Clear Communications subsidiary for $860.9 million cash last October, expecting to slash back-office duplication, use TelstraClear's backhaul and transmission services, and cut its reliance on Chorus.
The combined businesses amalgamated as at March 31 and the performance of both the existing and acquired business "was in line with expectations in an increasingly competitive market," the company said. TelstraClear was renamed as Vodafone Fixed and the net assets were valued at $843.6 million.
