Spark New Zealand (SPK) H1 2025 earnings summary

Executive summary

• Revenue declined 1.9% year-over-year to NZD 1.93 billion for H1 2025, mainly due to lower mobile, IT services, and legacy voice revenues, partially offset by growth in mobile devices, cloud, data centers, and IoT.

• Adjusted EBITDAI fell 15.5% to NZD 448 million, with reported EBITDAI down 20.9% to NZD 419 million, impacted by lower IT project activity, a shift to public cloud, and supplier cost inflation.

• Net profit dropped 77.7% to NZD 35 million, with adjusted NPAT down 64.3% to NZD 56 million, reflecting lower EBITDAI and higher depreciation/amortization.

• Free cash flow increased 67.4% to NZD 77 million, driven by disciplined CapEx and working capital management.

• Interim dividend of NZD 0.125 per share declared, 75% imputed, in line with full-year guidance and supported by expected Connexa sale proceeds.

Financial highlights

• Mobile service revenue declined 3.7% to NZD 491 million, with enterprise/government down 17.7% and consumer/SME down 2.3%.

• Broadband revenue fell 2.3% to NZD 302 million; IT revenues declined 1.5% to NZD 336 million, with IT services down 10% and high-tech revenues up 17%.

• Data center revenue grew 13.6% to NZD 25 million; IoT connections increased 25% to over 2.2 million.

• Operating expenses rose 3.1% year-on-year, with network support costs up 30% and other OpEx up 14%.

• Depreciation and amortization increased 20% to NZD 300 million due to recent capital investments.

Outlook and guidance

• FY 2025 adjusted EBITDAI guidance reduced to NZD 1.04–1.1 billion, reflecting IT spending cuts and price competition.

• CapEx guidance maintained at NZD 415–435 million; free cash flow aspiration set at NZD 300–340 million, excluding Connexa proceeds and transformation costs.

• Dividend guidance of NZD 0.25 per share maintained, with a review of capital management strategy planned for FY 2026.

• Mobile service revenue expected to decline ~1% for FY 2025; data center and high-tech revenue growth targets remain on track.

• Expanded SPK-26 Operate Programme targeting NZD 110–140 million annualized benefits by FY 2027.