Spark NZ shares tumble on guidance miss
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More news: Shares in Spark New Zealand lowered on the ASX after the New Zealand telco failed to meet its downgraded earnings guidance.
Shares were down 6.8% to $3.66 by 1:35pm AEST, having fallen nearly 25% since the turn of the year.
Spark NZ misses downgraded earnings guidance
The news: Spark New Zealand failed to meet its downgraded earnings guidance after a "challenging year" for the company.
The numbers: Spark posted earnings before interest, tax, depreciation, amortisation, and investment income (EBITDAI) of NZD1.16 billion ($1.06 billion), a decline of 32.5% year on year, and below its reduced guidance range of NZD1.17 billion to $1.21 billion, which was downgraded in May.
Net profit plunged 72.2% to NZD316 million while total revenue fell 14% to $3.86 billion.
The board declared a total dividend of 27.5 cents per share, 100% inputed, in line with last year's payout.
Spark guided EBITDAI of $1.165 billion to $1.22 billion in FY25 and total dividends of 27.5 cents per share, 75% inputed.
The context: The Auckland-based telco said that recessionary economic conditions created a "tough operating environment" during the year. It noted that public sector spending cuts and deferred private sector investment had a "significant impact" on IT services revenues, while lower household and business spending weighed on mobile devices and accessories sales, and intensified competitive pricing pressure.
Spark flagged that its data centre strategy is a "significant mid-term growth opportunity", while the company is exploring equity funding options such as capital partnerships to help fund further growth investments.
What they said: "We did see strong growth in many of our core markets such as mobile, where service revenue surpassed $1 billion for the first time, as well as cloud, data centres, and high-tech," said Spark chair Justine Smyth.
"This was not enough to offset subdued demand in other areas, and we could not adapt our cost base quickly enough as the market turned," she said.
The source: ASX announcement
