New Zealand operator Spark recorded robust financials in the first half of fiscal 2020 (to end-December 2019) as strengthening tariffs and subscriber gains fuelled steady growth in mobile revenue, which prompted it to raise its full-year target.

In a statement, Spark CEO Jolie Hodson said: “We are heading into the second half with great momentum and some stand-out performances across our core segments. We outperformed our growth targets in mobile, with a shift to unlimited and high value plans.”

Spark chair Justine Smyth noted it made significant investments in network infrastructure, which “improved our competitive advantage and diversified our business beyond traditional telecommunications into growth segments like digital services and sports streaming”.

Net profit rose 9.2 per cent year-on-year to NZD167 million ($106.8 million), partly driven by a 4.5 per cent reduction in depreciation and amortisation expenses.

Operating revenue rose 4 per cent to NZD1.82 billion, with a 5 per cent increase in mobile revenue to NZD653 million and a 12.3 per cent gain in cloud, security and service management turnover to NZD219 million offsetting a double-digit fall in fixed-line revenue.

Spark increased its full-year target for mobile service revenue growth to 4 per cent to 5 per cent: it previously tipped a 2 per cent to 3 per cent rise.

In fiscal H1, it noted post-paid ARPU stablised at for the first time in at least three years, as adoption of unlimited plans more than doubled, with the figure standing at NZD42.82. Prepaid ARPU of NZD13.28 rose 8.1 per cent.

Post-paid subscribers increased 5.1 per cent to 1.29 million, while prepaid fell 2.1 per cent to 1.18 million.

The operator said it delivered NZD29 million in gross savings through productivity gains from a move to new IT systems and simplifying is product offering.

Total capex fell 6.4 per cent to NZD247 million, with mobile network spending increasing 3.4 per cent to NZD92 million. Its capex target for the full fiscal year is NZD370 million, compared with NZD417 million in fiscal 2019.