Spark blames COVID-19 for slight revenue decline in H1

24 Feb 2021

New Zealand telco Spark has announced a 1.5% decline in revenue to NZD1.796 billion (USD1.316 billion) for the first six months to 31 December 2020, which it attributed to the loss of higher-margin mobile roaming revenue from sustained COVID-19 border closures, and a one-off provision to refund historical wire maintenance charges. Although mobile service revenue fell 1.2% year-on-year, the operator stressed its underlying performance remains strong, as the figure would have increased 3.8% y-o-y if the impact of the loss of roaming is excluded. EBITDAI grew 0.4% y-o-y to NZD502 million, driven by a 2.3% fall in operating expenses to NZD1.294 billion, while net profit for the period was down 11.4% at NZD148 million due to an increase in depreciation and amortisation charges resulting from the shorter asset lives of new digital technologies, and an increase in depreciation related to customer and property leases. Total capital expenditure in the period stood at NZD192 million, compared with NZD247 million in H1 FY20.

At 31 December 2020 Spark reported a total of 2.406 million mobile telephone subscribers, a 2.7% decline from 2.472 million twelve months earlier, while total mobile ARPU was 0.1% higher y-o-y at NZD28.51. Total broadband connections stood at 703,000, up 1.6% compared with H1 FY20, thanks to a 17% rise in wireless connections (165,000 customers) and a 12.1% increase in fibre subscribers (381,000).

Spark Chairperson Justine Smyth said: ‘COVID-19 has continued to challenge us as a nation, but it is encouraging to see New Zealand’s economy bouncing back more quickly than expected. With borders closed for the foreseeable future we have had to adapt at pace to the ongoing loss of mobile roaming revenues and lower growth broadband and pre-paid markets.’

New Zealand, Spark