Spark New Zealand (SPK) H2 2025 earnings summary

Executive summary

• FY 2025 was challenging, with lower customer spending and a tough economic environment impacting demand, but results were delivered within updated guidance.

• A significant transformation program was implemented, focusing on cost reduction, portfolio simplification, and a new five-year strategy prioritizing core connectivity and long-term shareholder value.

• Divestment of non-core assets, including a 75% stake in the data center business, generated substantial proceeds to fund core investments and reduce debt.

Financial highlights

• Adjusted revenue declined 4.2% year-over-year to NZD 3.7 billion, mainly due to IT, mobile, and legacy voice declines; reported revenue was NZD 3.725 billion, down 2.5%.

• Adjusted EBITDA/EBITDAI fell 8.9% to NZD 1.06 billion; reported EBITDAI was NZD 1.053 billion, down 7.7%.

• Adjusted net profit dropped 33.6% to NZD 227 million; reported NPAT was NZD 260 million, down 17.7%.

• Free cash flow was steady at NZD 330 million, with CapEx reduced 17.2% to NZD 429 million.

• Final FY 2025 dividend declared at NZD 0.25 per share, in line with guidance.

Outlook and guidance

• FY 2026 EBITDA/EBITDAI guidance: NZD 1.010–1.070 billion, reflecting partial deconsolidation of the data center business.

• BAU CapEx expected at NZD 380–410 million; data center CapEx NZD 50–70 million in H1 2026.

• Free cash flow guidance: NZD 290–330 million, with a 100% payout ratio for dividends.

• ROIC targeted at 11–13% by FY 2030, up from 8.7% in FY 2025.