Telecom Corp. of New Zealand, the nation’s largest provider of Internet connections, fell the most in more than 3 1/2 years after saying earnings may decline as more competition weighs on prices.
Earnings before interest, tax, depreciation and amortization will be flat to a low single-digit percentage decline in the year ending June 30, 2013, the Auckland-based company said in a statement today. The shares fell 8.5 percent, their biggest daily decline since Oct. 16, 2008.
Telecom last year split from its Chorus network unit, and operates as a provider of telecommunication services as well as being New Zealand’s second-biggest mobile phone company. It faces growing competition as Vodafone Group Plc and Telstra Corp. plan to merge their New Zealand units.
“Telecom’s operational performance reflects an increasingly competitive market,” Chris Quin, who acted as chief executive officer after Paul Reynolds stepped down June 1, said in the statement. “We expect strong competition to continue with increasing consolidation.”
Replacement chief executive Simon Moutter took over on Aug. 13.
Telecom shares fell 23.5 cents to NZ$2.52 at the 5 p.m. market close in Wellington trading.
Operating earnings were NZ$1.05 billion ($853 million) in the 12 months ended June 30, the company said. Full-year net income was NZ$1.16 billion including five months of Chorus trading before the split. Profit from continuing operations was NZ$422 million, up 8.8 percent from a year earlier.
Second-half profit from continuing operations was NZ$182 million. In June, the company said profit would be near the top of a NZ$160 million to NZ$190 million range.