Telecom New Zealand has announced its financial results for the six months ended 31 December 2012, reporting adjusted total revenues of NZD2.125 billion (USD1.77 billion), down 8.5% from NZD2.322 billion in the year-ago period. Earnings before interest, tax, depreciation and amortisation (EBITDA) were NZD516 million, compared with NZD1.656 million for the prior comparative period, while net profit after tax fell from NZD1.006 billion in the six months to end-December 2011 to NZD163 million twelve months later. The year-ago comparisons include a significant non-cash gain from the demerger of its fixed line infrastructure business Chorus in late 2011. After adjusting for non-recurring or unusual items, Telecom reported EBITDA of NZD506 million, an increase of 3.7% year-on-year, as reduced operating costs more than offset a fall in revenue. In August 2012 Telecom said it expected flat to low single digit EBITDA decline in the current financial year from NZD1.092 billion, but the company now expects adjusted EBITDA to be in the range NZD1.040 billion-NZD1.060 billion. Telecom said the change in guidance is primarily due to ‘the broadband market having been more competitive than anticipated previously.’ Chief executive Simon Moutter commented: ‘This guidance excludes any one-off costs associated with implementing the strategy which we anticipate recognising in the second half. We have a highly complex business and our operating costs are higher than our industry peers. We believe it is imperative that we move quickly to execute the new strategy and we must have a competitive cost base to succeed in a fast-changing marketplace.’
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