$5.8m bad debt provision hurts Nortel’s NZ result

Profit increase marred by impairment charge after parent's chapter 11 filing

Despite marked increases in revenue and gross profit for the year ended 31 December 2008, Nortel’s local business posted an overall loss of $2.3 million for the period — greater than the previous year’s loss of $1.59 million.

Revenue rose 46 percent to $2.6 million for the 2008 full-year over the previous year, while gross profit more than doubled to just over $9 million.

However, the New Zealand subsidiary made a $5.8 million provision in 2008 for receivables from the parent company, which filed for chapter 11 bankruptcy protection in the US in January and under the Companies’ Creditors Arrangement Act in Canada.

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