Gen-i margins improve

Telecom's IT services unit Gen-i has reported improved margins, fulfilling to some extent a demand CEO Paul Reynolds made shortly after his appointment.

Gen-i's second quarter earnings before interest, tax and depreciation (EBITDA) were up 9 percent, driven by IT solutions growth, lower costs and activity in Australia, Telecom announced at its results meeting in Auckland today.

$348 million in contracts were closed compared with $310 million in the same period of the 2009 financial year.

IT solutions margins increased from 6 percent to 8 percent, but Telecom says it is targetting 10 percent in future.

Gen-i's operating revenues for the second quarter, however, were down 7.8 percent from $390 million to $359 million. Costs declined faster, from $335 million to $299 million, leaving EBITDA of $60 million, up from $55 million.