A lift in mobile revenue, lower depreciation costs and falling finance expenses have boosted Spark's bottom line.
Spark's revenue has risen by $10 billion compared with the same period a year ago. Photo: RNZ / Nate McKinnon
Spark chair Justine Smyth said the company has posted a strong result amid the ongoing disruptions caused by the Covid-19 pandemic.
The growth was led by its mobile services business, with earnings rising 5 percent to $441 million.
Key numbers (six months ended Dec 2021 vs year ago):
- Net profit $179m vs $148m
- Revenue $1.89b vs $1.79b
- Underlying profit $538m vs $502m
- Dividend 12.5cps vs 12.5cps
"Despite closed borders keeping roaming revenues suppressed, we delivered a market-leading mobile performance, underpinned by precision marketing and increasing customer demand for data, with 48 percent growth in our endless plans year-on-year," Spark chief executive Jolie Hodson said.
Spark's revenue from its cloud computing, security and service management business also grew by 3.2 percent.
However, Hodson said growth in that area was lower than expected, as the shift towards public cloud computing put pressure on pricing and Covid-19 restrictions had reduced client site visits.
The company's improved net profit was also supported by a $6m reduction in finance expenses and a $5m fall in depreciation costs.
Broadband sales fell 4 percent for the half to $324m, as Spark faced increased competition from other providers. However, the company said it maintained its margins as the benefits of wireless broadband offset the higher input costs of fibre broadband.
Spark said it was on track to hit its reduced target to add between 15,000 and 20,000 new wireless broadband connections. It fell well short of its goal to add 40,000 wireless customers last year.
The company said Spark Sport saw strong revenue growth over the half, but its detailed performance is unknown as it is lumped in with "other operating revenue".
The streaming service was dealt a blow when Sky TV snapped up the broadcasting rights for the English Premier League for the next six years.
It now expected its full year underlying profit to be at the top end of its forecast of between $1.13b and $1.16b.
Spark TowerCo subsidiary announced
The company today announced plans to establish a new subsidiary, Spark TowerCo, which would hold its 1500 passive mobile sites.
Spark is on the lookout for third-party investment partners to maintain the assets.
"We can see globally that shared ownership models are an effective way of improving returns from infrastructure assets that are not critical to competitive advantage," Hodson said.
"In mobile, our active assets are what drives our competitiveness - including our core network and radio equipment.
"Our passive mobile assets, on the other hand, are the physical towers that support this active equipment."
By separating these assets into a subsidiary and bringing in an investor, the company could maintain the assets more cheaply, she said.