Additional costs TelstraClear had to absorb after the Canterbury earthquakes have tipped the company's balance sheet into a loss for the year ended June.
Chief executive Allan Freeth yesterday reported the company's earnings before interest and tax had fallen to a loss of $5 million in the year, compared with a profit of $16 million in the previous corresponding period.
Earnings before interest, tax, depreciation and amortisation were $133 million, down from $157 million last year. Total income was up at $701 million but so too were operating expenses at $568 million.
"The ebit loss of $5 million reflects the impact on revenue and additional costs the company has absorbed from the Christchurch earthquakes. This is a good result given the unforeseen costs and pressures."
Christchurch was important to TelstraClear, Dr Freeth said. The company had a customer care centre in the city, operated an ultrafast hybrid fibre system and based some network operations in the city.
"We are committed to Christchurch and, like other companies with a strong presence there, were especially affected by the earthquakes."
While a good deal of time, energy and attention was taken up in the aftermath, the company was able to deliver year-on-year national revenue growth in the business and government, consumer and wholesale segments, he said.
TelstraClear was able to continue its planned targeted investments that would ensure readiness to deliver a full range of business and consumer products and services in the Government's ultrafast broadband network as well as its own cable services, Dr Freeth said.
Telstra Corp Ltd, Australia's biggest phone company and owner of TelstraClear, reported a 16.8% fall in full-year net profit as it counted the costs of investing heavily in a bid to win market share and of restructuring its business.
Net profit for the year to June was $A3.23 billion ($NZ4.04 billion), down from $A3.88 billion a year earlier but above market expectations.
Craigs Investment Partners had a forecast of $A3.1 billion for the profit result, broker Chris Timms said.
"The result was ahead of our expectations, although there were no surprises."
It was pleasing to see an improvement in mobile connections, with Telstra gaining 742,000 new subscribers in the year.
It was hoped the company would be able to update the market on the Australia Government's national broadband network (NBN) at the October 18 annual meeting, he said.
Telstra said for the year ahead earnings before interest, tax, depreciation and amortisation would register low single digit growth.
In June, the Australian Government and Telstra agreed an $A11 billion deal to use Telstra's fixed-line phone assets as the basis for its NBN, the country's biggest infrastructure project in decades.
Telstra said there would be no material impact from the NBN in the year to June 2012.
