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Optus restructure sees 9.2% net profit slump

Optus has reported a third-quarter slump in net profits of 9.2 percent on the back of slow mobile subscription growth as the company moves out of a restructure phase.
Written by Josh Taylor, Contributor

In the last three months of 2012, Optus has reported a decline in net profits of 9.2 percent to AU$160 million, down from AU$177 million in the previous quarter.

Part of this was attributed to a decline in operating revenue of 5.7 percent to AU$138 million due to the mobile termination rate change in 2012. Equipment sales decreased by AU$43 million, due to lower shipment volumes with device subsidies reduced. There was also a one-off AU$30 million of ex-gratia charges as a result of the workforce cuts.

In the quarter, Optus continued with its restructure, reducing its head count by 305. In the year since announcing the restructure, Optus has reduced its headcount by 962, or 9.9 percent of its staff.

The company added 58,000 new post-paid mobile customers, but lost 36,000 prepaid customers due to churn from prepaid wireless devices. Average revenue per user was stable, at AU$43, Optus said.

Optus has still not revealed the number of 4G devices it has sold, but the company said 64 percent of total capital expenditure in the quarter was spent on mobile in rolling out the company's long-term evolution (LTE) network and the 900MHz 3G network.

Additional capital expenditure was spent on upgrading core IT systems and infrastructure in the quarter.

Optus shed 7,000 unbundled local loop customers in the quarter, bringing its base down to 519,000 customers, and also shed 7,000 hybrid fibre-coaxial (HFC) customers down to 491,000.

SingTel group CEO Chua Sock Koong and Kevin Russell, Optus' CEO, Consumer Australia, will be speaking with Australian media about results at 1.10pm AEDST.

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