Weaker demand and higher costs weigh on Spark NZ profit
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The news: Telecoms company Spark New Zealand has posted a sharp drop in first half profit amid weaker demand in some of its businesses and higher interest costs.
The numbers: Statutory profit for the first-half to December 2023 slumped 81.8% to NZD157 million ($148 million), while revenue was down 22% to NZD1.98 billion. Excluding the gains on its TowerCo business stake sale and provision for Spark Sport last year, adjusted earnings were up 3.9% to NZD530 million.
The company will pay an interim dividend of NZ44 cents, down from NZ67 cents a year ago.
The context: Spark said its results were partly lower due to the one-off gains last year when it sold a 70% stake in the TowerCo business to the Ontario Teachers Pension Plan.
The telecoms operator also saw lower demand in some areas of the business amid an economic downturn, but is confident it can still achieve full-year guidance for adjusted earnings of between NZD1.215 billion and NZD1.26 billion, and a capital expenditure of NZD510 million to NZD530 million.
What they said: “In an inflationary environment, we must remain focused on disciplined cost control, and as we implement our new strategy we are creating a more efficient, low-cost operating model,” CEO Jolie Hodson said.
The source: ASX announcement
