Spark New Zealand downgraded its earnings guidance for fiscal 2024 ending 30 June, forecasting lower profitability due to a weak demand for ICT services from the enterprise and government sectors.

In a stock market filing, the operator said it expects EBITDAI (which includes net investment income) to come in between NZD1.17 billion ($701.7 million) and NZD1.21 billion compared with NZD1.19 billion in fiscal 2023. The new guidance ranges between a 1.9 per cent decline and a 1.4 per cent increase.

A previous guidance predicted EBITDAI to increase between 1.8 per cent and 5.6 per cent.

The operator explained since the beginning of the year “public and private sector spending cuts have deepened”, and Spark has seen significantly lower demand in IT service management and professional services and delays to planned digital transformation projects. 

Mobile and broadband services revenue is in line with expectations. However, Spark noted sales of mobile devices and accessories have been softer than expected as high interest rates and cost-of-living pressures slow consumer spending.

Its capex guidance remains unchanged at NZD510 million to NZD530 million, compared with NZD515 million in fiscal 2023, and its dividend payment will not change.