Spark New Zealand’s total revenue in fiscal 2014 dropped 2.6 per cent to NZD3.64 billion (US$3.07 billion) while net profit from continuing operations increased 20 per cent to NZD323 million.
The revenue decline was driven primarily by the continued softening of its fixed-line business, which saw revenue fall NZD54 million in the second half. That was a big improvement over H1, when fixed-line revenue declined NZD98 million.
Spark Chairman Mark Verbiest said the second-half results show a “significant slowing of the long-term decline in earnings”.
The company cut operating expenses by 5.6 per cent — the result of a restructuring programme in 2013 called ‘Turnaround’ aimed at improving productivity as well as the customer experience. It reduced its workforce by 5.7 per cent to about 5,500 during the period.
The company, previously known as Telecom New Zealand until August 8, added 191,000 mobile connections (up 10 per cent from fiscal 2013) and grew mobile revenue 6 per cent. In the second half it had 83,000 net additions.
It now has more than two million mobile connections for a 36 per cent market share, behind market leader Vodafone New Zealand with 42 per cent, according to GSMA Intelligence.
Broadband connections rose 3 per cent during the year to 670,000.
Fiscal 2014 capex increased 9 per cent to NZD459 million (the company announced earlier in the year it would invest NZD158 million in four lots of 700MHz spectrum).
Including earnings from discontinued operations following the sale of its AAPT business in Australia, its net earnings after tax was NZD460 million, up 93 per cent from the previous year. EBITDA from continuing operations was up 7.1 per cent. After excluding NZD101 million of restructuring-related expenses in fiscal 2013, EBITDA from continuing operations fell 4 per cent.
The company announced a NZD0.08 dividend for the second half, bringing its dividend for the full year to NZD0.17 – up NZD0.01 from fiscal 2013.