A big part of the revenue and profit tumble was because the FY2023 result benefitted, to the tune of $583m, from the sale of 70% of the passive assets on Spark’s celltower network (and a one-off negative, with $54m in costs associated with the closure of Spark Sport).
On an adjusted basis, revenue was down 1.2%, net profit was down 21%, and ebitdai down 2.5%.
Spark chair Justine Smyth said it had been a challenging year for Spark and for many businesses across the country, with economic conditions creating a tough operating environment.
“Public sector spending cuts and deferred private sector investment had a significant impact on IT services revenues, while lower household and business spending impacted mobile devices and accessories sales, and intensified competitive pricing pressure, particularly in business mobile,” she said.
“While we are disappointed to not achieve our FY24 ambitions, as we look to the year ahead our business fundamentals are strong, our underlying drivers of growth are enduring, and our continued focus on cost reduction will improve margins and support growth.”
Spark chief executive Jolie Hodson said the 2024 result was below expectations, but business fundamentals remained strong.
“As we move through this period, we do so with solid foundations – customer satisfaction is up seven points, employee engagement remains strong, and we have maintained top-quartile sustainability benchmarking against our peers locally and globally,” she said.
“We have also continued to make significant investments into the digital infrastructure that underpins New Zealand’s economy, supports businesses both big and small to grow, and unlocks new commercialisation opportunities for Spark.”
Spark invested more than $350m in network and digital infrastructure, with 28% growth in mobile network capacity.
The company is forecasting a full-year dividend of 27.5cps and underlying profit between $1.165b and $1.22b, with capital spending in a range of $460m and $480m.
With reporting by Herald staff.
