Quakes push TelstraClear to pre-tax loss

TelstraClear ebitda fell 20% to $A84 million, parent company Telstra reported in its full-year result this morning.

Allowing for “intercompany revenues”, ebitda declined by 15.3% for the 12 months ending June 30, the company said.

On an ebit basis, TelstraClear lost $A28 million, against a $A14 million ebit loss last year.

Revenue declined 3% to $A514 million, but in local currency terms and excluding intercompany revenue grew 1.2% from $NZ693 million to $NZ701 million.

Capital expenditure fell from $NZ88 million to $NZ85 million.

Operating expenses grew 6.4% to $NZ568 million.

The company blamed a series of one-off costs for the rise, including recovery and restoration following the Christchurch quakes; costs associated with a call centre “transition” (aka off-shoring jobs to the Philippines).

There was also a 5.2% rise in bad debt, “reflecting the challenging economic environment.”

On the plus side – without detailing numbers – TelstraClear said it had gained broadband customers, thanks to local loop unbundling (regulatory changes that have allowed it to move its own gear into Telecom exchanges) and investment in its hybrid fibre coaxial (HFC) cable network, which operates in Wellington and Christchurch.

Chief executive Allan Freeth called it a "good result in a difficult year". In statement, Dr Feeth said, "Christchurch is important to TelstraClear. We have a customer care centre there, operate an ultra-fast hybrid fibre coaxial (HFC) system, and base some network operations in the city. Like other companies with a strong presence there, were especially affected by the earthquakes."

$A10.15 billion ebitda for Telstra
Parent company Telstra reported a 17.5% fall in net profit to $A3.25 billion - slightly better than the analyst consenus of $A3.10 billion.

Ebitda declined 6.4% to $A10.15 billion. Analysts had been expecting an 8.5% decline.

Revenue increased 0.7% to $A25.09 billion.

A 14 cent fully franked dividend was recorded, as expected.

The company said it would maintain a fully franked full-year dividend of 28 cents for 2012.

It expected to return to "low single digit" ebitda growth over the 12 months ahead.

The hot and the not
Over the six months to June, Telstra's number of fixed-line customers fell from 8.37 million from 8.53 million - reflecting the slow but sure declined in tradtional business that's afflicting telcos worldwide.

The total number of fixed-line broadband customers declined slightly over the period, from 3.31 million to 3.28 million.

Total mobile customers increased from 13.50 million to 14.22 million. Vodafone Hutchison Australia (VHA), 10% owned by Telecom New Zealand, lost 504,000 customers over the six months in the wake of negative publicity and customer protest over network problems.

Within that headline number, there was a healthy bump in mobile broadband customers, up from 2.17 million to 2.58 million.

Telstra has been more aggressive in its mobile network upgrades than any New Zealand carrier (TelstraClear lacks its own mobile network; the subsidiary sells a rebadged version of Vodafone's service). On August 29, it's scheduled to launch an LTE or so-called 4G service in Sydney, Melbourne and Brisbane.

There was also strong growth in the company's new set-top box, albeith off a low base, with T-Box sales increasiing from 107,000 to 192,000.

Telstra recently reached an $A11 billion pact with the Australian Federal government that ensure's the telco's participation in the National Broadband Network.

In midday trading, Telstra shares [ASX:TLS] were up 4.24%. The broader market was up 0.27%.