Telecom has recorded half-yearly earnings of $300 million, roughly in the middle of analysts' estimates.
Telecom said the result was down on the same period last year as a result of costs flowing from its "growth initiatives" in Australia, including the takeover of AAPT.
While total revenues of $2,673 million were up only 2.3%, Telecom's vastly greater stake in Australia saw Australian revenues up 50% over the same period last year. The other bright light for the company, which has seen its share price sag in the past year, was the financial performance of Southern Cross Cable Networks, in which Telecom has a 50% stake.
"Telecom is delighted with the performance of the 50%-owned Southern Cross Cable network which came into service during November, with a vast expansion of bandwidth in and out of Australasia," said chairman Dr Roderick Deane. "From this investment, we expect an initial dividend of approximately $US100 million this financial year."
Data revenues, driven largely by growth in IP network-based products such as JetStream, grew 14.1% and internet revenues in New Zealand increased 15.6% on the back of what the company described as "rapid growth in customers and usage". The AAPT-owned ISP Connect.com.au Internet and e-commerce business in Australia saw revenue grow 64%.
Deane hailed "significant progress" for the company over the half year, citing the successful completion of Telecom's full takeover of AAPT and the start of a major business relationship with the Commonwealth Bank of Australia.
Deane said the roll-out of Telecom's CDMA cellular network in New Zealand remained "firmly on track" while the mobile business achieved record growth in customers.
He also said it was "pleasing to see uncertainty removed around the future regulatory regime for telecommunications in New Zealand. The Government's new policy should allow robust competition to continue and provide the flexibility Telecom needs to develop its business."
Telecom will pay a fully-imputed dividend for the second quarter of 2000 of 5 cents per share, unchanged from the first quarter. The dividend will be paid in New Zealand and Australia on 16 March 2001, and in New York on 23 March 2001. A 3% discount to current market price will apply to shares issued under the dividend reinvestment scheme.
Deane said the Board and management were committed to lifting the performance of Telecom in the short term, as well as to improvement in earnings over the long term through transformation into an Australasian online and communications group.