6 Nov 2009

Tax credit boosts Telecom quarterly profit to $163m

12:34 pm on 6 November 2009

Telecom has seen a rise in its quarterly profit, as a tax credit offset a fall in revenue.

The company made a profit of $163 million in the three months to September, an increase of 9% on the same period a year ago.

Telecom says earnings have been bolstered by a $43 million one-off tax credit, while it also received a $35 million dividend from its undersea fibre network unit Southern Cross Cable.

However, once those are excluded, the results show Telecom still faces intense competition from rivals such as Vodafone.

Revenue fell 7% to $1.4 billion as sales declined in its fixed line calling and broadband businesses, offseting a rise in mobile phone services.

Telecom responded to the fall in revenue by cutting costs, which fell 9% to $909 million.

The company is spending billions of dollars upgrading its broadband and mobile networks to attract users Telecom hopes will spend more on phone services, but it is not expecting earnings to start rising again until 2011.

Telecom declared a dividend payout of 6 cents a share.