Steady-going for Gen-i in Telecom results

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IT services division holds up, sheds contractors

By Computerworld staff | Auckland | Friday, 13 February, 2009

Gen-i’s contribution was a relative bright spot in Telecom’s half year result to December, with the IT services division contributing EBITDA of $237 million.

The figure was down 4% on last year, a better result than the overall Telecom group’s performance, a 59% fall in net profit and 5.5% fall in operating earnings.

In its investor presentation announcing the results, released today, Telecom notes that Gen-i brought in operating revenue of $761 million, up 6% on the half-year to December 2007, but that operating expenses were $524 million, up 11%.

In the October-December quarter, $310 million of client contracts were signed, according to Telecom.

Also noted in the investor presentation is that “economic conditions are driving client focus on cost”.

Telecom also revealed in the presentation that the number of contractors on Gen-i’s books was down by 70 in the October-December quarter, a 23% reduction in headcount compared with the previous quarter.

That confirms comments made by Gen-i CEO Chris Quin to Computerworldearlier this year noting that contractor numbers are down and that permanent staff are becoming easier to hire.

The Telecom investor presentation notes that Gen-i’s goals for the third and fourth quarters — the first half of this year — include focusing on cost and improving service performance and client satisfaction.