June 01, 2016
Two Degrees still too many degrees from profits
The country’s third mobile phone network operator, Two Degrees, is reporting a net loss of $33.1 million, but drawing consolation from a 43 percent increase in its earnings before interest, tax and depreciation.
Chief executive Stewart Sherriff says that reflects strong financial performance in a year that Two Degrees became a full service telecommunications provider with the acquisition of Christchurch broadband provider Snap.
But the company’s Maori shareholders have to wait a bit longer for good news about their investment.
In results filed with the Companies Office today, two Degrees reported revenue profit of $569.1 million in the years to December 31, 2015.
But extending its network to cover 95 percent of the population and the cost of acquiring Snap meant a loss of $33.1 million, a 6 percent improvement on last year’s $35.2 million loss.
Stewart Sherriff says the company is earning enough to pay for development out of revenue, but it’s trying to build a large business rather than a smaller one that maybe profitable sooner.
That’s not good news for the Maori spectrum trust Te Huarahi Tika and its commercial subsidiary Hautaki, whose shareholding has dropped to just 2 percent, nor to Tuaropaki Trust and Wairarapa Moana, which also have stakes.
Te Huarahi Tika’s latest accounts were tagged by the auditors, who said with no prospect of dividend income from its only asset, it was only able to stay solvent by selling some of the shares it holds on behalf of Maori.
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