Photo: RNZ / Kim Baker Wilson
Telecommunications company Spark has reported a large drop in revenue and profit reflecting weaker demand in some parts of the business alongside high inflation and cost of living pressures.
Key numbers for the six months ended December compared with a year ago:
- Net profit $157.0m vs $837m
- Revenue $1.98b vs $2.63b
- Underlying profit $530.0m vs $1.04b
- Interim dividend 13.5 cents a share vs 13.5 cps
The year earlier first-half revenue included a net gain of $584m from the sale of a stake in TowerCo - its towers business and other one-time adjustments.
"While Spark's products are largely resilient to economic downturns, they are not immune, and we saw weaker demand in some areas of the business," chair Justine Smyth said.
"Despite these challenges Spark continued to deliver top-line growth and has made solid progress implementing its new three-year strategy, with cornerstone digital infrastructure investments in data
centres and 5G Standalone progressing to plan.
"With the ongoing exponential growth in data, businesses digitisation and cloud adoption, and the rapid uptake of generative AI, demand for data centre capacity is accelerating, and Spark is well positioned to capture its share of this growing market."
Chief executive Jolie Hodson said mobile continued to be central to Spark's growth, with revenue up 6 percent, and market share growth.
"We have maintained broadband revenues and margin despite high levels of price competition in an inflationary environment, and now have 31 percent of our customer base on wireless," Hodson said.
"We have also returned cloud to growth through the successful launch of our new hybrid cloud proposition CloudIQ, with margin benefits flowing through from our cost base reset."
Hodson said the company was also focused on cost control in response to inflation.
The company expected to Spark New Zealand Limited full year underlying profit in a range of $1.215b and $1.26b, capital expenditure between $510m and $530m and a full year dividend of 27.5 cps.