The following is a summary of the Spark New Zealand Limited (SPKKY) Q2 2024 Earnings Call Transcript:
Financial Performance:
Spark New Zealand reported adjusted revenue growth of 1.3% to $1.98 billion, largely due to performances in mobile and momentum in data centers and high-tech.
Adjusted EBITDAI increased by 3.9% to $530 million, indicating strong cost control as operating expenses remained stable.
Adjusted NPAT however decreased by 4.8% to $157 million, due to increased interest rates and higher payments on Connexa leases.
Capital spending was higher in H1 due to accelerated investments to initiate new strategies, impacting free cash flow.
Interim FY '24 dividend was declared at $0.135 per share, 100% imputed.
Revenue through mobile services saw a rise of 6.3%, while broadband revenue remained unchanged at $309 million.
Business Progress:
Spark NZ made considerable progress implementing its new 3-year strategy, including accelerating digital infrastructure investments and redesigning its operating model to meet FY '26 targets.
Investments in emerging technologies like 5G stand-alone and converged technology open new commercialization opportunities.
Advancements in data center investments led to a revenue increase of 38.5% to $18 million after a 10-megawatt expansion in August '23.
Commitment to sustainability was evidenced by an 8% reduction in greenhouse gas emissions compared to H1 of FY '23.
Ongoing transition from copper to fiber and wireless networks continues with the base sitting at 31% at the end of the half.
With a focus on cost management and infrastructure scaling, the company is preparing for requirements for 2025.
Key growth opportunities lie in areas like hybrid cloud and data centers, IoT as connections continue to scale, and 5G infrastructure investment.
More details: SPARK NEW ZEALAND LTD SPON ADR EA REPR 5 ORD NZD0.00 IR
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