Spark profit grows 13% in FY17
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New Zealand’s Spark has reported a 13% increase in net profit for the financial year ended in June as a result of one-off gains and improved mobile performance.
Net profit grew to NZ$418 million ($305.7 million), with revenue increasing 3.3% to NZ$3.61 billion. Mobile revenue grew 5.6% due to a 4.1% increase in high margin service revenue and a 4.3% growth in total connections.
Spark also increased its wireless broadband subscriber base by nearly 17% to 84,000, while the company increased its fiber broadband subscriber base by nearly 74% to 172,000.
The company has to date migrated more than a third of its customers off its legacy copper network and on to wireless broadband as well as fiber services via the state-led Ultrafast Broadband national fiber network project.
Fixed voice and managed data revenues meanwhile fell 12% to NZ$104 million due to ongoing substitution. Part of this substitution involves the migration of 11,000 voice only connections on Spark’s VoLTE service.
For the current year, Spark is anticipating a 0-2% increase in both revenue and ebitda, and a slightly lower capex spend of NZ$410 million.
The operator said it plans to increase its emphasis on wireless services and investment, and to develop its multi-brand strategy to better serve the low end of the market.
Questions & Answers
Q.What were the primary reasons for Spark's reported profit growth in FY17?
What were the primary reasons for Spark's reported profit growth in FY17?
Spark's net profit increased due to one-off gains and better mobile performance. This was further boosted by a 5.6% rise in mobile revenue, driven by growth in high-margin service revenue and total connections.
Q.How did Spark's fixed line and data services perform in the last financial year?
How did Spark's fixed line and data services perform in the last financial year?
Fixed voice and managed data revenues decreased by 12% to NZ$104 million. This decline was attributed to ongoing substitution, including the migration of 11,000 voice-only connections to Spark's VoLTE service.
Q.What are Spark's key strategic focuses and financial outlook for the current year?
What are Spark's key strategic focuses and financial outlook for the current year?
Spark expects revenue and EBITDA to increase by 0-2% in the current year, with slightly lower capital expenditure at NZ$410 million. The company plans to boost its emphasis on wireless services, investment, and develop a multi-brand strategy.
Q.What progress has Spark made in moving customers off its older copper network?
What progress has Spark made in moving customers off its older copper network?
Spark has migrated over a third of its customers from the legacy copper network. These customers have moved to wireless broadband and fibre services, utilising the state-led Ultrafast Broadband national fibre network project.
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