Telecom says it is on track to deliver first half year earnings before interest, taxes, depreciation, and amortisation (EBITDA) guidance of around $560 million, with net earnings guidance expected to be between $160 and $190 million.
Acting CEO Chris Quin says cost cutting measures have negated the impact on revenue made by increased competition in the telco market.
“During the first quarter of calendar 2012 there was an increase in competitive activity in the fixed line and mobile markets. However, despite increased competition, our focus on reducing costs sees us on track to deliver EBITDA guidance as planned,” says Quin.
“Competitors have been very active with a variety of new offers, which has increased customer churn. We are firmly focused on responding and improving customer retention, for example, adding value to our products such as increased data caps on broadband plans.”
Telecom says it expects to deliver Capex near the top end of the $190m to $220m guidance range.
In addition, Telecom has announced it will delist from the New York Stock Exchange (NYSE) in an effort to further reduce costs.
"The delisting, in time, will reduce administration costs and complexity associated with the NYSE listing," says Telecom in a statement. "ADRs equate to 15 percent of Telecoms listed shares, and therefore Telecom will retain an ADR programme in the US, on the ‘over-the-counter’ (OTC) market to enable investors to trade ADRs. Trading on the OTC market is expected to commence on July 10. Telecom’s ordinary shares will continue to be listed and traded on the NZX and ASX."
Telecom says its last day of trading on the NYSE will be 9 July, with delisting effective as of 19 July.
Telecom will report its first half year result in late August/early September. Its new CEO Simon Moutter is due to officially start with the company on September 1.