Optus suffers 7.5pc profit slump

User Comment: LEAD Technologies Inc. V1.01 Source: The Australian

AUSTRALIA'S second-biggest telco, Optus, has suffered a 7.5 per cent slump in net profit for the year to March 31.

But its earnings have risen three per cent for the three months to March 31 and one per cent for the year.

In what it described as "stable" financial results, Optus today said its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew to $700 million for the March quarter.

It recorded the result against a backdrop of what it described as "negative revenue growth in the Australian mobile industry".

Full year EBITDA grew to $2.38 billion despite a five per cent decline in revenue.

However, its net profit for the year dropped by 7.5 per cent to $728 million and by 6.9 per cent for the March quarter to $249 million.

Optus' underlying net profit, which excludes one-off items, fell by 4.5 per cent to $764 million for the year and by 3.6 per cent to $257 million for the March quarter.

The telco's chief country officer, Australia, Kevin Russell said Optus was focused on "driving sustainable, profitable growth and positioning itself to capitalise on mobile data revenue growth".

"We are committed to a sustainable business model and to rekindling the spirit of the Optus brand with a transformation program that fundamentally improves the services we deliver to our customers," he said. "Optus is building a strong, highly competitive mobile network through investments that are delivering enhanced 3G in-building coverage and 4G services in major population centres."

Optus continued to grow its postpaid mobile customer base with net additions of 28,000 for the quarter. Postpaid customers now comprise 57 per cent of the total base, up two percentage points from a year ago. Prepaid subscribers remained stable at 4.09 million.

Optus grew the number of 4G mobile handsets on its network to 785,000.

Optus is a wholly-owned division of Singapore Telecommunications. SingTel today announced a two per cent drop in fourth-quarter underlying net profit to $S1 billion ($810 million). Its full-year underlying net profit fell two per cent to $S3.61 billion while its underlying net profit for the quarter, when exceptional items were included, fell 33 per cent to $S868 million. That figure was due to a one-time loss of $S225 million from the divestment of telco Warid Pakistan.

Revenue for the group was down six per cent to $S4.48 billion but EBITDA was stable at $S1.43 billion.

View the original article here

Cash income slump hits savers

Prescott Securities chief economist Darryl Gobbett Source: National Features

PEOPLE seeking the safety of cash within their investment and superannuation funds are effectively losing money.

Low interest rates have resulted in many cash investment options paying just 2 per cent interest annually, below our 2.2 per cent inflation rate.

Even the popular industry super funds haven't escaped the low return trap, with the biggest funds now offering about 2.6-2.8 per cent.

But experts say there are ways to lift cash returns if you are prepared to do some work.

"A lot (of cash funds) are down to about 1.5 to 2 per cent because they're investing in bank bills at about 3 per cent and then they take out a 1.5 per cent management fee," says Prescott Securities chief economist Darryl Gobbett.

He says people should avoid basic cash options and instead seek term deposits, which are still paying about 4 per cent and are offered by more and more super funds, investment funds and wrap accounts.

Gobbett says retirees relying on cash income can hold a mix of term deposits rolling over every three, six and 12 months.

"Be careful what you are in. That's why we like term deposits - you know what you have got and you know what you are going to get back."

Impact Financial Coaching director Allan Ward says it is always worth checking your interest rate and looking around for something that delivers a better return "without sacrificing security".

"Beware of investments that say they are a fixed rate of return but offer way above market rates. If it looks like a term deposit but is paying twice as much as a term deposit, it's not a term deposit," he says.

Research group Canstar says cash management trusts that were paying almost 6.5 per cent interest in 2008 are now offering just over 2.5 per cent.

Canstar research manager Chris Groth says it is impossible to predict where cash interest rates will go, but warns people about switching to higher-risk assets such as shares that are paying about 6 per cent. "Keep in mind all those reasons for going to cash in the first place," he says.

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INCOME CHECK

Visit your fund's website or make a phone call to get the latest cash performance.

Expand the monthly return to get your annual rate. A figure of 0.22 per cent equals 2.64 per cent a year.

Check if your super or fund offers term deposits, which are still paying about 4 per cent.

Examine other options but work out your tolerance to risk.

View the original article here

Cash income slump hits savers

Prescott Securities chief economist Darryl Gobbett Source: National Features

PEOPLE seeking the safety of cash within their investment and superannuation funds are effectively losing money.

Low interest rates have resulted in many cash investment options paying just 2 per cent interest annually, below our 2.2 per cent inflation rate.

Even the popular industry super funds haven't escaped the low return trap, with the biggest funds now offering about 2.6-2.8 per cent.

But experts say there are ways to lift cash returns if you are prepared to do some work.

"A lot (of cash funds) are down to about 1.5 to 2 per cent because they're investing in bank bills at about 3 per cent and then they take out a 1.5 per cent management fee," says Prescott Securities chief economist Darryl Gobbett.

He says people should avoid basic cash options and instead seek term deposits, which are still paying about 4 per cent and are offered by more and more super funds, investment funds and wrap accounts.

Gobbett says retirees relying on cash income can hold a mix of term deposits rolling over every three, six and 12 months.

"Be careful what you are in. That's why we like term deposits - you know what you have got and you know what you are going to get back."

Impact Financial Coaching director Allan Ward says it is always worth checking your interest rate and looking around for something that delivers a better return "without sacrificing security".

"Beware of investments that say they are a fixed rate of return but offer way above market rates. If it looks like a term deposit but is paying twice as much as a term deposit, it's not a term deposit," he says.

Research group Canstar says cash management trusts that were paying almost 6.5 per cent interest in 2008 are now offering just over 2.5 per cent.

Canstar research manager Chris Groth says it is impossible to predict where cash interest rates will go, but warns people about switching to higher-risk assets such as shares that are paying about 6 per cent. "Keep in mind all those reasons for going to cash in the first place," he says.

--

INCOME CHECK

Visit your fund's website or make a phone call to get the latest cash performance.

Expand the monthly return to get your annual rate. A figure of 0.22 per cent equals 2.64 per cent a year.

Check if your super or fund offers term deposits, which are still paying about 4 per cent.

Examine other options but work out your tolerance to risk.

View the original article here

Cash income slump hits savers

Prescott Securities chief economist Darryl Gobbett Source: National Features

PEOPLE seeking the safety of cash within their investment and superannuation funds are effectively losing money.

Low interest rates have resulted in many cash investment options paying just 2 per cent interest annually, below our 2.2 per cent inflation rate.

Even the popular industry super funds haven't escaped the low return trap, with the biggest funds now offering about 2.6-2.8 per cent.

But experts say there are ways to lift cash returns if you are prepared to do some work.

"A lot (of cash funds) are down to about 1.5 to 2 per cent because they're investing in bank bills at about 3 per cent and then they take out a 1.5 per cent management fee," says Prescott Securities chief economist Darryl Gobbett.

He says people should avoid basic cash options and instead seek term deposits, which are still paying about 4 per cent and are offered by more and more super funds, investment funds and wrap accounts.

Gobbett says retirees relying on cash income can hold a mix of term deposits rolling over every three, six and 12 months.

"Be careful what you are in. That's why we like term deposits - you know what you have got and you know what you are going to get back."

Impact Financial Coaching director Allan Ward says it is always worth checking your interest rate and looking around for something that delivers a better return "without sacrificing security".

"Beware of investments that say they are a fixed rate of return but offer way above market rates. If it looks like a term deposit but is paying twice as much as a term deposit, it's not a term deposit," he says.

Research group Canstar says cash management trusts that were paying almost 6.5 per cent interest in 2008 are now offering just over 2.5 per cent.

Canstar research manager Chris Groth says it is impossible to predict where cash interest rates will go, but warns people about switching to higher-risk assets such as shares that are paying about 6 per cent. "Keep in mind all those reasons for going to cash in the first place," he says.

--

INCOME CHECK

Visit your fund's website or make a phone call to get the latest cash performance.

Expand the monthly return to get your annual rate. A figure of 0.22 per cent equals 2.64 per cent a year.

Check if your super or fund offers term deposits, which are still paying about 4 per cent.

Examine other options but work out your tolerance to risk.

View the original article here