MELBOURNE (Standard & Poor's) Feb. 7, 2003--Standard & Poor's Ratings Services said today that Telecom Corp. of New Zealand Ltd. (TCNZ, A/Stable/A-1) continues to benefit from its strong market position in New Zealand, enabling the generation of solid operating cash flow and further restoration of the group's financial profile in the six months to Dec. 31, 2002. Although the company's Australian business faces challenges in a tough operating environment, cost-cutting and lower capital expenditure across the group underpinned a 4% increase in underlying EBITDA and NZ$425 million in debt reduction. Annualized debt to EBITDA totaled 2.4x for the six months to Dec. 31, 2002, with further debt reduction expected to improve the ratio to at least 2x by fiscal 2004.
