Spark reports strongest H1 revenue growth in three years

19 Feb 2020

New Zealand telco Spark has announced revenue growth of 4.0% to NZD1.824 billion (USD1.167 billion) for the half year to 31 December 2019, its strongest performance in three years. The company attributed this to a 5.5% rise in high-margin mobile service revenues, continued growth in cloud, security and service management (up 12.3%), as well as a moderation in the rate of decline in legacy voice services (down 11.6%). EBITDAI rose 2.2% during the period to NZD500 million, driven by strong revenue growth momentum and a focus on execution and cost management, while net profit rose 9.2% to NZD167 million. CAPEX fell 6.4% to NZD247 million, in line with the company’s target to reduce full-year spending from NZD417 million to NZD370 million, although mobile network investment increased to NZD92 million (from NZD89 million in H1 FY19) in support of increased capacity and the initial deployment of 5G wireless services.

At 31 December 2019 Spark reported a total of 2.472 million mobile telephone subscribers, an increase of 1.5% y-o-y, while the number of post-paid customers notably grew by 5.1% to 1.287 million. Total mobile ARPU rose 3.3% compared with H1 2019, to NZD28.48 a month. Total broadband connections stood at 692,000, down 0.9% compared with H1 2019, although revenue and gross margin improved thanks to a 9.3% increase in wireless connections (141,000 customers) and a 24.5% rise in fibre subscribers (340,000)

Spark chairwoman Justine Smyth said the improved performance was founded on the company’s strong execution of its strategy and a greater customer focus: ‘Our move to Agile ways-of-working continues, with ongoing incremental gains in our speed to market, customer understanding and focus, and in building a high performance and inclusive culture. We have made significant investments in Spark’s network infrastructure, which has improved our competitive advantage, and diversified our business beyond traditional telecommunications into growth segments like digital services and sports streaming.’

New Zealand, Spark