<div><p>New Zealand's largest listed company Telecom Corp. Friday reported net profit in the year to June fell 43.9 percent due to the impact of the recession and investments in new technology.</p><p>Net profit dropped to 398 million dollars (270 million US) from 710 million dollars in the previous year, the country's dominant telecoms company said.</p><p>The company said it calculated that the slowing economy had led to the cut of 40 million dollars from profits.</p><p>"While the impact has remained consistent with the previous three quarters, the potential exists for the impact to increase," said chief financial officer Russ Houlden.</p><p>Capital investments during the year rose 33 percent to 1.3 billion dollars, including the launch of a 3G mobile network in May.</p><p>Chief executive Paul Reynolds said the impact of the launch of the new mobile network would start to become apparent in the results for the first quarter of the current year.</p><p>"Telecom is getting it right as we invest and rebuild with the aim of returning to earnings growth," Reynolds said.</p><p>Revenue for the year dropped slightly to 5.60 billion dollars from 5.67 billion dollars in the previous year to June.</p><p>Depreciation and amortisation costs rose 20 percent to 917 million dollars, due in part to the investment in new assets and the looming phasing out of its old mobile network.</p><p>Net finance costs rose 36 percent to 201 million dollars because of lower cash balances.</p><p>The company maintained its guidance that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) during the current financial year would be in the range of a one percent decline to a two percent rise.</p><p>But it added that this would depend on potential risks from the economic downturn.</p><p>James Lindsay, joint domestic equity manager at Tyndall Investment New Zealand, told Dow Jones Newswires the result was very close to expectations.</p><p>"It's still a reasonably disappointing trend, they are still guiding to a pretty much flat (EBITDA) result for next year, and that shows that there's nothing startlingly different," Lindsay said.</p><p>Reynolds told reporters the company expects to increase EBITDA by between four and six percent in the three years from July 2010.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=57161004&bid=informcom" /></div><div id="copyright"><div>

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