Spark New Zealand profit falls 18% to NZ$260m
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The news: Telecommunication business Spark New Zealand has reported a 17.7% fall in net profit after tax to NZD260 million ($237.4 million) as the company faced lower consumer spending and price competition, among other "economic headwinds".
The numbers: FY25 net profit after tax was ahead of the NZD316 million Spark posted in FY24, and below the market consensus estimate was NZD270.6 million.
Earnings before interest, tax, depreciation, amortisation, and investment income (EBITDAI) was NZD1.05 billion, which is 7.7% lower than the NZD1.14 billion reported in the preceding year and in line with the market consensus estimate of NZD1.05 billion. Revenue declined 2.5% to $3.73 billion in FY25, behind $3.8 billion.
A total dividend of 12.5 NZ cents per share was declared, bringing the full-year total to 25 NZ cents per share. This is higher than the 27.5 NZ cents declared in FY24 but behind the expected 23 NZ cents.
Spark's guidance for FY26 is for adjusted EBITDAI of between $1.01 billion and $1.07 billion, excluding contributions from the sale of a 75% stake in its data centre business to Pacific Equity Partners, agreed to in August 2025.
Spark is also guiding free cash flow of between $290 million and $330 million with the dividend payout ratio guided for 100% of FY26 free cash flow.
The context: Spark chair Justine Smyth said FY25 "has been one of the most challenging periods in Spark's history" as the company faced "economic headwinds, materially lower customer spending, and ongoing structural change in some of our markets".
The company also sold its remaining stakes in mobile tower infrastructure company Connexa and Hutchinson Telecommunications for combined proceeds of $356 million.
The source: ASX
