Spark New Zealand Limited (NZX: SPK) H2 FY21 Results

Wednesday 18th August 2021

Spark New Zealand today announced that resilient revenues and disciplined cost reduction had delivered EBITDAI growth of 1% to $1,124 million, towards the top end of the guidance range.

The loss of $38 million in roaming revenues led to a revenue decline of 0.8% to $3,593 million, masking a strong underlying performance in mobile and cloud, security, and service management.

Mobile service revenue grew 0.5%, or 4.3% when adjusting for the impact of roaming, while mobile service revenue market share grew 1.1 percentage points to 41.5%. Cloud, security, and service management revenue grew 5.5%, as businesses continued to digitise.

The broadband market remained challenging, with continued competitive pressure and slower overall market growth leading to a revenue decline of 1.5%. Wireless broadband growth was below target, however momentum picked up in the final quarter with Spark finishing the year with connection growth of 19,000.

Spark New Zealand Chair Justine Smyth said: “The New Zealand economic recovery has been stronger than expected, but with recent travel bubble pauses, uncertainty remains. Closed international borders continue to impact Spark through the loss of roaming revenues, lower overall growth in some markets, and talent scarcity within the technology sector.

“In this context, we’re pleased with the strong underlying growth we are experiencing in our core markets, and in Spark’s ability to adapt at pace and execute disciplined cost management to deliver EBITDAI growth. This resilience in customer demand for our core services has supported free cash flow and enabled us to maintain the total FY21 dividend at 25 cents per share for our shareholders.”

NPAT declined by $36 million, or 8.6%, primarily driven by higher depreciation and amortisation costs due to the shift to shorter asset lives and increased customer and commercial lease activity, as well as a $21 million increase in tax expense as Spark cycles the one-off decrease in FY203.

While the loss of roaming negatively impacted free cash flow, disciplined cost and capital management mitigated the majority of the impact, with Spark generating $433 million of free cash flow4 for the year.

Spark announced an H2 FY21 dividend per share of 12.5 cents, bringing the total FY21 dividend to 25 cents per share, 100% imputed. Spark will continue to operate the Dividend Re-investment Plan for H2 FY215.

Please see the links below for details

Investor Presentation

Detailed financial information

Annual Corporate Governance Statement 2021

Modern Slavery Statement FY21

Source: Spark New Zealand Limited

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