Chorus receives a surprise boost in revenue

Telecommunications company Chorus received its expected significant lift in revenue from the full period of regulated price changes, Forsyth Barr broker Lyn Howe said yesterday.

Revenue was up 10% to $529million in the six months ended December compared to $479million in the previous corresponding period.

Operating expenses dropped nearly 5% to help lift the operating profit to $335million, up 22% on the pcp. The reported profit doubled to $66million, even with higher finance and tax expenses.

Ms Howe said the operating profit was higher than her forecasts, mainly due to a change in treatment of costs for a fibre call centre but also lower provisioning costs. The reported profit was in line with expectations.

``Stripping out the noise of change in accounting treatment, this result does not change our view. We continue to see line loss from both competing fibre and fixed wireless as the biggest medium to long-term risk. This result does nothing to change that.''

Outgoing Chorus chief executive Mark Ratcliffe said the six-month period was particularly busy due to the company's ongoing focus on delivering better broadband for customers.

``Fibre has well and truly hit its tipping point in becoming the broadband product of choice for customers.''

Between July and December, Chorus built 67,000 new fibre connections nationwide, up from 55,000 from the previous six months. The average time customers had to wait for a fibre connection reduced from 17 days to 10.

With one in three broadband customers now having moved to fibre or a high-speed service, it was time for Chorus to do more to raise New Zealanders' awareness of the better broadband choices existing today, he said.

Yesterday was Mr Ratcliffe's last day as chief executive of Chorus. Shares last traded at $4.08, down 8c.