Vodafone NZ slumps to $28 million loss
Vodafone New Zealand's financials are matching its logo for the first time in 13 years, as the company plunges into the red with a net loss of $27.9 million for the year ending 31 March 2014.
The loss is the company's first since 2000 and comes on the back of its acquisition of TelstraClear two years ago.
In the previous financial year 2013, Vodafone clocked up a net profit of $55.9 million off revenue of $1.77 billion – a big drop from the previous year's $175 million profit off $1.62 billion revenue.
This year's loss comes off revenue of $2.06 billion.
But while revenue was up 16% for the year, it wasn't enough to offset the increasing costs experienced by New Zealand's largest mobile phone operator.
Cost of sales increased from $757 million to $910 million, while employee benefits were up from $242 million to $315 million.
Depreciation and amortisation also increased from $253 million to $387 million.
Meanwhile the company recorded non-current liabilities of $1.5 billion, including $1.38 billion owed to Vodafone Group – made up of $807 million in principal and $572 million in interest – and $119 million to Vodafone Overseas Finance.
The Vodafone Group payable is due for repayment in July 2015, while the Vodafone Overseas Finance payable is due for repayment in October 2017.
Vodafone Group funded the $861 million October 2012 acquisition of TelstraClear and its subsidiary Clear Communications, which brought together Vodafone's strength in mobile with TelstraClear's strength in fixed communications offerings, particularly in the corporate market.
TelstraClear was renamed Vodafone Fixed in November the same year, before being amalgamated with Vodafone New Zealand on 31 March 2013, with Vodafone valuing the assets at $843.6 million.
Under the rural broadband initiative contract with the New Zealand government, Vodafone is committed to building 154 new cell sites and upgrading 387 existing sites over six years. The report notes that as of 31 March 2014, Vodafone New Zealand had claimed $32.1 million, up from $5.6 million in 2013, in government grant monies.
The company also invested $68 million in 700MHz spectrum for its 4G services for Vodafone Mobile, in auction which concluded in June 2014.