Half Year 2024 Spark New Zealand Ltd Earnings Call Transcript
Key Points
- Spark New Zealand Ltd (NZSE:SPK) delivered adjusted revenue growth of 1.3% to $1.98 billion, driven by strong mobile performance and momentum in data centers and high-tech.
- Adjusted EBITDAI grew 3.9% to $530 million, indicating effective cost control and operational efficiency.
- Mobile service revenues increased by 6.3% to $510 million, capturing 47% of total connection growth.
- Cloud revenue grew by 3.8%, with gross margins improving by 7.6% due to a reset cost base.
- The company declared a half-year FY24 dividend of $0.135 per share, fully imputed, reflecting strong shareholder returns.
- Adjusted NPAT decreased by 4.8% to $157 million, primarily due to higher average interest rates on debt and higher interest payments on Connexa leases.
- Capital expenditure was higher in the first half, impacting free cash flow negatively.
- Broadband revenue declined by 1.3% to $309 million, reflecting high competition and inflationary pressures.
- Digital health revenues fell by 8.7% to $42 million, impacted by a slowdown in public sector demand.
- The economic environment, including high inflation and cost of living pressures, dampened demand in some parts of the public and private sectors.
(spoken in foreign language) Good morning. Thank you for joining us today as we share Spark's half-year results for the period December 31, 2023. This morning, I'm going to provide an overview of our results and an update on our strategy. I'm then going to hand over to Stefan Knight, our CFO, to speak to our financial performance in more detail before we move to Q&A.
So as was the case for most businesses, we experienced a challenging operating environment during the half with a high inflation, cost of living pressures and uncertainty resulting in lower levels of consumer business confidence. Our core telco products are resilient during economic downturns, but not immune and uncertainly, did dampen demand in some parts of the public and private sectors. Despite these challenges, we continue to deliver top line growth and made solid progress in implementing our new three-year strategy. I'm going to speak to the adjusted numbers for the purposes of providing a like-for-like comparison, which strips out the impact of the
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