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Spark New Zealand Limited (NZX: SPK) H1 FY21 Results

Wednesday 24th February 2021

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Spark New Zealand today announced its financial results for the six months to 31 December 2020.

Revenue decreased 1.5% to $1,796 million due to the loss of higher-margin mobile roaming revenue from sustained COVID-19 border closures and higher voice revenue declines due to a non-recurring provision to refund historical wire maintenance charges.

While mobile service revenue declined $5 million, or 1.2%, Spark’s underlying performance remains strong. When stripping out the impact of the loss of roaming, mobile service revenue increased 3.8% from H1 FY20.

Spark continued to experience growth in cloud, security and service management revenue, which increased 4.6% to $229 million.

The broadband and prepaid markets were impacted as border closures resulted in approximately 44,000 fewer people migrating to New Zealand in H1 FY21 vs. H1 FY20. Disciplined cost management saw operating expenses decrease $30 million, or 2.3%, offsetting revenue declines. As a result, EBITDAI grew 0.4% to $502 million.

Net profit after tax reduced 11.4% to $148 million, driven by a $29 million increase in depreciation and amortisation charges resulting from the shorter asset lives of new digital technologies, and an increase in depreciation related to customer and property leases.

Spark announced an interim dividend per share of 12.5 cents, 100% imputed, and will also continue to operate the Dividend Re-investment Plan with a 2% discount.

Spark Chair Justine Smyth said: “COVID-19 has continued to challenge us as a nation, but it is encouraging to see New Zealand’s economy bouncing back more quickly than expected.

“With borders closed for the foreseeable future we have had to adapt at pace to the ongoing loss of mobile roaming revenues and lower growth broadband and prepaid markets.

“The implications of COVID-19 for Spark have become clearer during the first half, with the overall FY21 EBITDAI impact now expected to be $50 million, versus the original estimate of $75 million.

“As a result, we have narrowed our FY21 EBITDAI guidance range to $1,100 million to $1,130 million, and the Board and I are pleased to revise full year dividend guidance to the top end of the range at 25 cents per share.”

Please see the links below for details: H1 FY21 Media Release

H1 FY21 Interim Financial Statements

H1 FY21 Results Announcement

H1 FY21 Distribution Notice

H1 FY21 Investor Presentation

H1 FY21 Detailed Financial Information

Source: Spark New Zealand Limited

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