Chorus profit drops 10% due to COVID-19 headwinds and increased competition

23 Aug 2021

New Zealand-based wholesale fixed line provider Chorus has announced its financial results for the twelve months ended 30 June 2021, reporting a slight decline in annual operating revenue from NZD959 million (USD654 million) to NZD947 million, which the company attributed to softer market conditions due to the ongoing effects of COVID-19 on broadband demand, together with competition from other fibre and wireless networks. EBITDA for the year was largely unchanged at NZD649 million (FY20: NZD648 million), while net profit was NZD5 million lower at NZD47 million, although slightly offset by a NZD13 million fall in operating expenses to NZD298 million. CAPEX during the reporting period rose by NZD9 million to NZD672 million.

At 30 June 2021 the company claimed a total of 871,000 fibre connections, up from 751,000 twelve months earlier, with gigabit connections growing from 16% to 19% of accesses. The company added that its fibre network – the Utra-Fast Broadband (UFB) network – was now 95% complete, while the UFB2 rollout was ahead of schedule and needed to pass 53,000 more premises by December 2022 to be complete. Meanwhile, total broadband connections fell by a net 26,000 to end the financial year at 1.18 million and the company’s fixed line base declined by 75,000 connections to 1.34 million.

Commenting on the results, Chorus CEO JB Rousselot said: ‘Despite the softer market in the wake of COVID-19, we continued our active wholesaler strategy and were pleased to grow total fibre connections to 871,000. We are well on the way to our target of one million connections next year. Today, there are about 140,000 homes and businesses that could switch on a fibre service in a matter of hours if they chose to, and another 280,000 with fibre at their gate.’

Chorus forecasts EBITDA of between NZD640 million and NZD660 million for FY22 and capital expenditure of NZD550 million to NZD590 million.

New Zealand, Chorus (New Zealand)