[Guidance update end of story]

Telecom (NZX: TEL) has reported a full-year ebidta decline of 6.5% to $1.768 billion, in-line with its earlier forecast, and analysts consensus expectation of a 5% to 8% decline for FY2009.

For the final quarter of the 2009 financial year, to June 30, ebitda was down 17% to to $406 million.

Full-year revenue was also in line with expectations, declining 2% to $5.587 billion.
fourth quarter revenue fell 7% to $1.351 billion.

Full-year net profit after tax ran slightly ahead of the consensus expectation at $483 million, a 32% decline over the 2008 financial year's $710 million. The result includes a one-off gain of $12 million from the sale of the ASH cable that links Amercan Samoa with Hawaii.

Fourth quarter NPAT fell 60% against the year-ago quarter to $70 million, slighly ahead of analysts' consensus.

Full-year expensens were down 1% to $3,819 billion.
Fourth quarter expenses were down 3% to $972 million, lead by a 4% fall in labour costs.

The fourth quarter dividend was announced at 6c a share, as previously flagged.

As expected, there was no Southern Cross Cable dividend.

Telecom again pegged the impact of the recession at $10 million, taking it to $40 million for the year.

In a note ahead of this morning’s full-year result, which was in line with his full-year expectations, ABN Amro Craigs’ Geoff Zame said Telecom’s Q4 numbers should represent “the low water mark for quarterly operating declines”.

But although the telco, which has been pushing through a cap-ex bubble, can now reap the rewards of its new mobile network, a serious turnaround could still be 12 months away.

“We expect a return to quarterly operating growth from 4Q10 as Telecom cycles zero Southern Cross dividends and high mobile subscriber acquisition costs this quarter. That is, positive earnings momentum is a year away," said Mr Zame.

Telecom FY10 guidance
Telecom is maintaining its guidance for Adjusted ebitda in the 2010 financial year to be -1% to +2% compared with 2009 financial year, subject to potential risks arising from the economic downturn.

NPAT guidaance is $370 milion to $410 million.

The Southern Cross Cable divident is expected to be $50 -80 million.