8 Aug 2008

Telecom profit down

9:37 am on 8 August 2008

Telecom's annual net profit is down by 26% due to higher costs and increasing competition.

Telecom made $713 million, in line with its forecasts. Part of the decline was due to the previous year when earnings were included from the sale of its Yellow Pages directory business which it has since sold.

The comparison excludes the one-off boost last year from the sale of Yellow Pages for just over $2 billion.

Chief executive Paul Reynolds says some of the increased costs are due to restructuring which has seen the company split into wholesale, retail, and networks businesses.

In the final quarter of the year, Telecom picked up more than half of all new broadband internet connections, with internet revenue for the three months, 6% higher than a year ago.

However, mobile phone revenue fell due to tougher competition and the cutting of prices.

Telecom will pay an 8 cent dividend for the quarter, taking its payout for the year to 29c per share.