Chorus increases profit, hikes dividend guidance, reveals $150m share buy-back

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Chorus has increased profit, bumped up its earnings guidance, hiked its dividend forecast and announced a share buyback.

Shares were up 6.8 per cent to $7.21 in midday.

The company reported a $42 million first-half net profit, up from the year-ago $24m (or an adjusted $27m).

Ebitda increased to $347m from $328m and revenue was $483m versus $477m.

Operating expenses dropped from $148m to $136m. Full-year cap-ex guidance was reduced from the previous $550m to $590m band to between $520m and $560m.

The UFB network operator's first-half dividend was bumped to 14 cents per share from the year-ago 10.5 cps.

And the company announced it would buy-back up to $150m of its own shares in a programme beginning on February 25.

Full-year ebitda guidance was increased to a $665m to $685m range from the previous $640m to $660m.

And full-year dividend guidance was upped from 26 cents per share to 35cps.

Its 2023 dividend is forecast at a minimum 40 cps.

And its 2024 profit payout is forecast at 45 cps.

Analysts expect Chorus' profit payout to reach as high as 50cps mid-decade as the capital-intensive UFB rollout winds down (the curbside rollout will wrap up this year) and it enters the relative stability of the new regulatory regime.

Chorus shares closed at $6.75 yesterday. The stock is down 16.15 per cent over the past 12 months.

Going into today's report, Jarden has a neutral rating on Chorus, with a 12-month target of $6.38.

Forsyth Barr was also neutral, with a 12-month target of $7.30.

The past 24 months has seen Chorus' stock rise as the company confirmed plans for higher dividends once the UFB rollout was behind it, then give back some of its gains as the Commerce Commission has finalised maximum allowable fibre revenue and other parameters under the new regulatory regime.