New Zealand Telecom's profit slumps as it restructures

New Zealand's Telecom Corp. said on Friday that annual net profit dived nearly 80 percent as it undergoes a "challenging" restructure designed to boost long-term competitiveness. The country's dominant telecoms player said net profit for the year to June 30 was NZ$236 million ($185 million), down from NZ$1.16 billion a year earlier, a plunge of 79.6 percent. It said profit fell 23.6 percent when restructuring and one-off costs were stripped out. Chief executive Simon Moutter said Telecom was intent on becoming more than a mobile and fixed-line infrastructure provider, branching out into areas such as entertainment and cloud computing to meet evolving demand. The company was also cutting costs and reducing staff, with the workforce slashed more than 16 percent to 6,600 since the start of the year, he said. "We know we must become, and remain, more competitive and we must continue to simplify and speed up our business to succeed in the long term," he said. "We applaud our staff for being up for the challenge and acknowledge that these hard decisions have incurred an emotional and financial toll." Chairman Mark Verbiest did not provide a specific guidance outlook but said the restructuring programme will take several years to fully implement. "It is going to take a concerted and disciplined effort over several years, but we believe this is the right long-term strategic path to build a more valuable company for our shareholders and contribute to a better future for New Zealand," he said. Telecom was down 0.89 percent at NZ$2.23 in mid-afternoon trading on a New Zealand market up 0.06 percent overall.