Brexit effect helps Vodafone NZ into the black
- 21 August, 2017 12:10
Brexit has been good news for Vodafone NZ, lowering its borrowing costs and helping it back into the black.
Vodafone NZ has made a profit and paid tax for the first time since 2013 - with a big assist coming from Brexit.
Vodafone's revenue cracked $2 billion, up 2.8 per cent, and the local company recorded a $57.5 million profit in the year to 31 March.
That profit turned around an $18.3m loss in 2016.
Net finance costs fell to $41.8 million from $71.7 million, assisted considerably it seems by exchange rate changes since The UK's Brexit decision.
Over the past two years the New Zealand dollar has appreciated from just over 40 cents in the UK pound to over 55 cents, making a big difference to the cost to Vodafone NZ of over $1 billion in loans from its UK parent.
The Brexit referendum vote which sent the pound into a nose-dive occurred on 23 June 2016, so Vodafone NZ has had the benefit of the improved exchange rate through most of its 2017 financial year.
Vodafone's accounts do not appear to disclose the interest rate paid on its UK-denominated loans, which also fell in total from $1.15 billion to $1.01 billion during the year.
Vodafone's arch-rival, Spark, also reported positive results this month with 3.3 per cent growth in total revenue for the year ended 30 June.
In a statement Vodafone NZ chief executive Russell Stanners described the results as "pleasing" in a very competitive market.
“This strong performance is the result of our focus on network experience and customer service combined with a strong focus on cost management," he said.
“Vodafone’s investment in our network and infrastructure have resulted in a series of independent endorsements, most recently being named the fastest mobile and fixed network operator in the country by independent consumer test Ookla.”
Other positive indicators included a 15 per cent reduction in calls to Vodafone's call centre and gains in customer satisfaction measures, he added.