News
New Zealand incumbent reports positive performances at mobile and broadband businesses.
Spark on Thursday reported ongoing earnings growth in the first half of its 2016 financial year, as expansion at its mobile and broadband businesses offset declines in traditional fixed-line services.
The New Zealand operator posted year-on-year EBITDA growth of 4.4% to NZ$455 million (€271 million) in the six months to the end of December. It returned to EBITDA growth in full-year 2015.
Revenue slipped by 4.1% to NZ$1.72 billion, but underlying revenues – recalculated to account for divestments, regulatory changes linked to the wholesale business, and the acquisition of cloud services company CCL Group – grew by 1.6%.
Net earnings increased by 7.5% to NZ$158 million.
"The Spark Home, Mobile & Business division had an excellent six months, with a greater focus on customers leading to better commercial outcomes," said Spark New Zealand managing director Simon Moutter.
"The performance in mobile has been particularly strong, with a focus on driving value rather than connections continuing to lift mobile revenue, and our value-add and multi-brand strategies helping to differentiate from the competition," he said.
Spark’s Home, Mobile & Business unit generated revenues of NZ$461 million from mobile, up 18% on the same period a year earlier. Broadband revenues came in at NZ$320 million, up 6%, but fixed voice revenues fell by 14% to NZ$171 million.
"In broadband, Spark is focused on holding its market share at the higher-value end of the market, but work is needed to shore up a decline in share at the lower value end, with aggressive price-based competition fuelling high rates of churn across the industry," Moutter said.
Meanwhile, Spark chairman Mark Verbiest said the board intends to pay an annual dividend of 22 cents per share, in addition to a special dividend of 3 cents per share.
"We anticipate the special dividends could continue into FY17 subject to no significant business changes," he said.
