As the rumoured resignation of Chief Executive Theresa Gattung was confirmed, Telecom announced a half year profit increase of 16% for the second quarter and raised its full-year forecast.
The company recorded a better-than-expected net profit of $228 million for the second quarter ended December 31.
The result compared with a net $196 million profit last year, after stripping out a $897 million writedown of its Australian operations.
Telecom says the planned sale of it Yellow Pages business is on track and there is strong buyer interest, but it has given no other details.
Gattung says indicative bids are due in early February, with due diligence scheduled to begin shortly after. "We expect any sale to be concluded by the end of this financial year.''
The company declared a dividend of seven cents a share. Shares in Telecom hit a 13-year low of $3.93 last May when the government said it would force the company to open its networks to competition. The shares closed on Thursday at $4.92.
The company raised its full-year profit forecast to between $875 million and $895 million from $820 million to $860 million,
The company reported adjusted net earnings after tax of $461 million for the half year to December, an increase of 16.7% on the same period a year earlier.
Reported earnings for the half year were $452 million compared with a loss of $466 million for the previous corresponding period.
Telecom says the increase in adjusted earnings reflected lower tax expense due to a $65 million tax credit to recognise tax benefits on the write-down of Australian assets in the prior financial year.
Outgoing CEO Theresa Gattung said mobile and IT had performed strongly in the December quarter.
She said mobile data revenues grew at 39% and 36.7% for the quarter and half year respectively, while net connections were at 100,000 for the December quarter.
"Mobile penetration in New Zealand is now close to 100% so we expect connection growth will slow in the near to medium term. Future revenue growth will be determined more by applications and content.
"Total broadband connections including (DSL and mobile) were 563,000 for the half year. Broadband growth slowed slightly in the December quarter following a period of sustained growth and this reflected seasonal variability and a shift in focus by wholesale customers to access and calling bundled packages," Gattung said.
The result included three abnormal items in the current half year:
There was an abnormal gain of $20 million on the sale of Telecom's 90% stake in Telecom Samoa Cellular Limited.
Restructuring costs totalled $27 million for Telecom's organisational re-design.
Provision of $16 million for the cost of rectifying several billing issues, mostly relating to prior periods, was also included.
