AAPT has posted strong first quarter earnings but its New Zealand owner predicts weaker performances ahead as the Australian telco continues to "reinvent" itself.
AAPT recorded earnings before interest, tax, depreciation and amortisation (EBITDA) of $29 million in the three months to September 30, up 61.1 per cent on the previous corresponding period.
First quarter operating revenue of $235 million was down 13.9 per cent on the same period last year, with lower revenues from calls, mobile and broadband internet. Data revenue was up 6.3 per cent. The improved EBITDA was achieved through cost reductions and products offered on AAPT's own network, its chief executive Paul Broad said.
"Improved commercial terms have also been agreed with Telstra," he said.
AAPT is a wholly-owned Telecom Corporation of New Zealand Ltd subsidiary. It holds approximately four per cent of Australia's telco market, with over 3,000 kilometres of its own fibre network.
Telecom NZ chief executive Paul Reynolds said today AAPT had posted a "great quarter" of earnings. "I wouldn't bank it for the future quarters, we think the underlying rate is probably about $22 million," he said.
The company's reconfiguration has seen it become akin to a startup company, he said, and its plans for the rest of the year revolved around moving its customers onto its new platforms.
"AAPT is reinventing itself as almost a startup telco," Reynolds said. "We are getting right off those legacy spaghetti systems in billing and customer management (and) that helps a business be more efficient and efficient and flexible going forward.
"So not surprisingly with that, the plan for the year is to complete our migrations from legacy systems.
"That will reduce churn, and in partnership with some strong marketing that's undergoing in the business, will help turn the consumer trend to one of growth and connections."
Telecom NZ's first quarter EBITDA dropped by 4.1 per cent on the previous corresponding period to NZ$447 million (AU$354.9 million), while operating revenue fell 6.5 per cent NZ$1.36 billion (AU$1.09 billion).
The group's EBITDA remained on track to achieve full year guidance of up to two per cent growth, Reynolds said. Telecom NZ declared a a first quarter dividend of six NZ cents per share, unchanged from last year. The group's shares were up four cents, or 2.03 per cent, at $2.01.
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