Telecom result a guessing game

Telecom's first set of financial results after its split with Chorus are likely to be complicated and some analysts don't know what to expect. Telecom will release its financials for the six months to December 31 on Friday. During the period being reported on, Telecom went through one of the biggest corporate shakeups in New Zealand history, with its network arm Chorus becoming a separate public company in November. Analysts say the split is likely to complicate the results and makes "meaningful comparisons" with previous periods difficult. A Deutsche Bank research note said the firm was unsure how Telecom would structure its reporting and predicted it would be "very messy in terms of detail". Forsyth Barr's Guy Hallwright believes the results will be complicated and a "halfway house" between what the market is used to and what it will see in the future. "From what I've seen the numbers are a bit all over the place from everyone." Hallwright also said his predictions on Telecom's net earnings were a bit "artificial" because the company was carrying most of the debt from the split with Chorus. "Exactly how they put it together is a little bit unclear at this stage ... the bottom line seems to range from $100 million to $200 million and the way I've got the numbers coming out at the moment (subject to adjustments) are about $135 million." A research note from Goldman Sachs has put Telecom's earnings before interest, tax, depreciation and amortisation (ebitda) at $545 million and adjusted net profit after tax (npat) would be $135 million. IDC's Glen Saunders would not offer any guesses on customer numbers, but was keen to see what Telecom reveals. "The challenges that Telecom have got, especially in mobile, are well documented, so we'll be very interested in what numbers come out."