Spark reports 5.2% revenue growth in H1 FY22, plans TowerCo subsidiary

23 Feb 2022

New Zealand telco Spark has announced ‘strong’ H1 FY22 financial results, with revenue, EBITDAI and net profit all in growth. Group revenue in the six months ended 31 December 2021 increased 5.2% year-on-year to NZD1.89 billion (USD1.27 billion), with a 5% rise in mobile revenue (NZD441 million) offsetting a 3.9% drop in broadband revenue (NZD324 million). EBITDAI was 7.6% higher at NZD538 million, while net profit after tax rose 21% to NZD257 million, driven by EBITDAI growth, a reduction in finance expense and lease liability interest, and lower depreciation and amortisation. CAPEX in the six-month period stood at NZD218 million, compared with NZD190 million in H1 FY21.

As of 31 December 2021 Spark reported a total of 2.421 million mobile subscriptions, a 4.5% rise from 2.406 million twelve months earlier, while mobile ARPU was 5.9% higher at NZD30.19 per month. Total broadband connections stood at 702,000 (down 0.1%), with a 28% decline in copper accesses largely offset by increased fibre (up 5.5%) and wireless (13.3%) subscriptions, while voice connections fell 20.8% y-o-y to 229,000.

Having previously conducted a review of its infrastructure portfolio during FY21, Spark also announced plans to establish Spark TowerCo as a subsidiary company, with the aim to ‘improve the performance, utilisation, and capital efficiency’ of its portfolio of around 1,500 mobile sites. Spark intends to commence a process in the second half of FY22 to explore the introduction of third-party capital into Spark TowerCo, however there is no certainty that a transaction will proceed. Commenting on the plan, Spark CEO Jolie Hodson said: ‘We can see globally that shared ownership models are an effective way of improving returns from infrastructure assets that are not critical to competitive advantage … By separating these assets into a subsidiary model, we can improve utilisation through coverage expansion, future service innovation, and increased tenancy, while delivering efficiencies in build, maintenance, technology, and lease costs as we expand mobile coverage across Aotearoa.’ Spark will provide more information on Spark TowerCo in the second half of FY22.

New Zealand, Spark