At a time when many companies have suspended 2020 earnings guidance, Chorus has this morning told the NZX it is on track to meet its forecast for operating earnings of between $640 to $655 million.
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And the broadband network operator says it will now spend less in 2020 than anticipated due to range of field work being suspended during the lockdown.
It had previously seen capital expenditure falling between $660m and $700m. It now sees a capex range of $610m to $650m.
The range of work on-hold includes:
• renewal and maintain service activity unless our network is at risk of immediate failure
• proactive-pole replacements
• fibre being laid at new subdivisions; and
• "communal" UFB work
The latter could be the most keenly-felt among work-from-homers, as it will mean retailers like Spark, Vodafone, 2degrees and Vocus can't get a copper line upgraded to UFB fibre during the lockdown.
However, Chorus says it will still connect households or businesses who lack any fixed-broadband solution or if they "have essential business or educational requirements not met by an existing broadband service."
Upgrades can also take place from ADSL to faster VDSL copper if an onsite visit is not required
Chorus also said that it would suspend a scheduled CPI (Consumer Price Index) or inflation-adjusted increase to its wholesale pricing that had been scheduled for October 1 this year (that is, into its 2021 financial year). The suspension is for an open-ended amount of time.
On stock markets worldwide, telecommunications companies have performed relatively well against other sectors in volatile markets - proving something of safe haven as demand for broadband only increases through the Covid-19 crisis.
Spark closed today up 7.3 per cent to $4.10. Despite recent knockbacks, the stock is still up 7.5 per cent for the year.
Chorus closed up 5.0 per cent to $6.92. The stock is up 19.9 per cent for the year.
The network operator's shares were on a bull run ahead of the Covid-19 scare after its solid half-hear result management commentary that dividends could fatten shortly as the UFB rollout, and the attendant heavy capex, winds down.
Forsyth Barr retained its outperform rating on Chorus as it looked to the "cash prize" ahead.
Jarden put a neutral rating on the stock after its half-year report, noting that the company still faces regulator uncertanty, with the government yet to finalise the market rules for the post-UFB rollout era. There is also market competition from Spark and Vodafone's foray into fixed-wireless, which cuts Chorus out fo the broadband picture.
Chorus says it has been in talks with the Ministry of Education over playing a role in connecting some 211,000 households without broadband as schools move to online learning solutions during what could prove an extended lockdown.
Yesterday, government chief digital officer Stuart Wakefield could offer only sketchy detail of the plan to keep children in low-income households connected to schools.
He said it could also involve low-tech solutions.
"We are also looking at delivery of learning plans and kits, and are currently investigating broadcasting options - TV and radio - which could provide another way to reach students and their whanau," he said.