Australian telecommunications giant Telstra reported a 44 per cent plunge in net profit after writing off US$546 million on its failed business with PCCW.
Telstra on Thursday announced a net profit of A$1.18 billion (about HK$5.59 billion) for the six months to December 31, down from A$2.09 billion a year ago, with a provision on Reach, its joint venture undersea cable company, dominating the worst half-yearly result since the company listed in 1997.
The writedown, revealed last week, slashed the value of Reach to zero on the books of Australia's dominant telecom carrier.
Earnings before interest and tax were down 3.3 per cent on the year-ago period, at A$3.5 billion, stripping out the writedown.
Telstra's shares fell 2.39 per cent on the announcement to A$4.08, just above a five-year low. The stock has been in the doldrums since it became clear a year ago that plans for the government to sell its remaining stake in the former state-owned company had stalled.
A larger final dividend of 14 A cents a share did nothing to calm investor fears of domestic drift amid competition from Singapore Telecommunications (SingTel) unit Optus and concerns that its Asian strategy is in deep trouble.