Telecom performed post-demerger accounting gymnastics to report a first half result that was broadly in line with market expectations yesterday, while unveiling a plan to buy back $300 million worth of its own shares this year.

Last November, Telecom separated its terrestrial network operations, Chorus, from the company and made it a separate, stand alone entity. Telecom is now a retail business, with a mobile network.

Chief executive Paul Reynolds said coming up with a series of numbers that compensated for the major sea-change in the company's operations was "no frivolous task".

The company reported an adjusted net profit of $240 million for the first half to December 31, up 51 per cent compared with the previous corresponding period. Telecom announced a first half dividend of 9 cents per share.

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The company's unadjusted net profit, including the five months of trading before the demerger of Chorus on November 30 and one month of trading as a slimmed down Telecom, came to just over $1 billion.

But the numbers seen as being the most representative of Telecom's operations - earnings before interest, tax, depreciation and amortisation (ebitda) - came in at $488 million - up just $1 million from a year earlier.

"It's going to be a while before all the dust clears after the separation because it has produced a lot of confusing information," Forsyth Barr analyst Guy Hallwright said.

The six-month period to June 30 would reflect a purely Telecom business.

BT Funds Management's chief investment officer Paul Richardson said Telecom was delivering on what it said it would at the demerger.

"On balance, it looks like some positive signs are coming out, given the environment that they're in.

"I would not describe it as a great result per se, but from those signals, and the way the business is travelling, it's looking relatively good," he said.

The unadjusted result included a large, non-cash accounting adjustment to demerger, as well as several other one-off items.

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The company forecast ebitda for the second half of $560 million, and an adjusted net profit of $160 million to $190 million. Telecom said its capital expenditure in the second half would be $190 million to $220 million.

Telecom had alluded to the likelihood of a share buyback, post demerger, although it came sooner than many analysts had expected.

Reynolds said the demerger was "probably the most complex corporate transaction in recent New Zealand history" and a world first for a telco. He agreed the demerger had made year-on-year financial comparisons complicated.

Telecom said its New Zealand mobile revenues were up 12 per cent compared to the first half of the prior financial year. This was mainly due to an increase in device revenues relating to a change in subsidy accounting.

Average revenue per user (arpu) increased 9 per cent, driven by strong growth in data.

In broadband, New Zealand revenues were up 5 per cent during the half, through a combination of an additional 7000 connections during the period and a 2 per cent increase in arpu. Information technology services' ebitda increased as costs continued to decline.

Telecom's traditional access and calling revenues continued to decline at around 4 per cent during the period, which it said was in line with worldwide trends.

Richardson said the challenge facing Telecom in the year ahead would be how it deals with the competition.

Telecom shares last traded at $2.135, down 1.5c.