New Zealand-based wholesale fixed line provider Chorus has announced a ‘solid’ performance in the first half of its 2022 financial year, despite COVID-19 disruptions. Operating revenue in the six-month period to 31 December 2021 increased marginally to NZD483 million (USD324 million), compared with NZD478 million (restated) in the corresponding period FY21, primarily due to gains from the company’s ongoing network optimisation programme, while EBITDA rose to NZD347 million (HY21: NZD328 million) and net profit after tax improved 55% year-on-year to NZD42 million.
Providing an update on the telco’s Ultra-Fast Broadband (UFB) rollout, Chorus CEO JB Rousselot noted the company has to connect just 30,000 more premises to complete its fibre network rollout. Some 1.3 million homes and businesses are now passed by Chorus’s UFB network, with 67% of these premises now connected to services – a two percentage point increase since end-June 2021. Fibre connections grew by 47,000 to 918,000 in HY22 and the company claims to be on track to achieve its target of one million fibre accesses by the end of the year. ‘The continued growth in fibre demand is a testament to the reliability fibre broadband is delivering through the challenges of the ongoing COVID pandemic,’ Rousselot said.
Chorus has raised its FY22 EBITDA guidance to between NZD665 million and NZD685 million (previously NZD640-660 million), while its expected gross capital expenditure range has been reduced from NZD550-590 million to NZD520-560 million. With the company now on the cusp of becoming free cash flow positive and beginning to earn more than it is investing in the network, it has also updated its dividend guidance for the next three years, to NZD0.35 in FY22, NZD0.40 the following year and NZD0.45 in FY24. In addition to the increased dividend, Chorus has also announced a share buyback of up to NZD150 million, which it describes as a tax-efficient allocation of surplus capital that will help boost future earnings per share and imputation credit reserves.