Chorus shares lift on earnings, dividend boost
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More news: Shares in Chorus surged in morning trade after the New Zealand telco boosted full-year earnings and raised its dividend, despite swinging to a loss in the 2024 financial year.
Chorus shares were up 9.6% to $7.96 by 11:55am AEST.
New Zealand telco Chorus swings to full-year loss
The news: Chorus swung to a loss in the 2024 financial year, missing analysts' forecasts, as higher interest rates and depreciation of its copper assets hit the New Zealand telco's earnings.
The numbers: Chorus reported an after tax net loss of NZD9 million ($8.25 million), having notched a net profit of NZD25 million in FY23. Analysts had anticipated a profit of NZD13 million, according to Visible Alpha data.
The company said the loss was due to a combination of a one-off NZD15 million non-cash tax expense following the removal of deductibility of tax depreciation for buildings, an NZD11 million increase in depreciation from the company's accelerated depreciation of copper assets, and higher interest costs.
EBITDA rose 4% year on year to NZD700 million, while revenue lifted 3% to NZD1.01 billion. Fibre connections grew by 53,000 to 1.084 million, with fibre uptake increasing 2 percentage points to 71.4%. The company, which has accelerated its program to retire its existing copper network, said remaining copper connections lowered 35% year on year to 157,000.
Chorus declared a total dividend of 47.5 cents per share in FY24, up from 43 cents last year but below average analysts' forecasts of 48 cents.
The telco set EBITDA guidance of between NZD700 million and NZD720 million in FY25, with expected dividends of 57.5 cents per share.
The context: The Wellington-based company, which announced the departure of its CEO JB Rousselot earlier this year, said the result was "steady" despite a "challenging macroeconomic environment". It described the year as Chorus' "first normal operating period" after the pandemic, workforce and weather challenges of the last few years.
It noted that revenue was driven up by inflation-linked price changes, and ongoing growth in the uptake of high-speed fibre plans. Meanwhile, operating expenditure edged up year on year, as tight cost management and favourable weather was offset by the impact of inflationary cost increases across the business.
What they said: "We've reset our strategy around the objective of being a 'simplified all-fibre business with 80% uptake by 2030'," said Chorus CEO Mark Aue. "The global shift to fibre gives us confidence in our technological and competitive advantage."
The source: ASX announcement
