Spark New Zealand (SPK) investor relations material

Executive summary

• Profitability improved in H1 FY26, with adjusted EBITDAI up 5.1% to $471 million and adjusted NPAT up 30.4%, driven by cost discipline and mobile service revenue growth, despite a 1.1% decline in adjusted revenue due to divestments and legacy declines.

• Free cash flow rose 84% to $107 million, reflecting higher EBITDAI and lower cash tax payments.

• Completed sale of a 75% stake in the data centre business, generating $453 million in initial proceeds and up to $98 million deferred, supporting debt reduction and financial flexibility.

• Declared an interim dividend of 8 cents per share, 50% imputed.

• Strategic focus on core connectivity, cost-out discipline, and mobile momentum supported growth in key financial metrics.

Financial highlights

• Adjusted revenue: $1,917 million, down 1.1% year-over-year; reported revenue: $1,893 million, down 1.2%.

• Adjusted EBITDAI: $471 million, up 5.1% year-over-year; reported EBITDAI: $448 million, up 10.3%.

• Adjusted NPAT: $73 million, up 30.4% year-over-year; reported NPAT: $64 million, up 82.9%.

• Free cash flow: $107 million, up 84% year-over-year.

• Interim dividend declared at 8 cents per share, 50% imputed.

• Net debt (ex-leases): $1.39 billion, 5% lower than June 2025; pro forma net debt post-data centre transaction at $940 million.

• Net debt to EBITDAI ratio reduced to 1.7 post-data centre transaction.

Outlook and guidance

• FY26 adjusted EBITDAI guidance reaffirmed at $1,010–$1,070 million, with a 45%/55% H1/H2 split expected.

• Free cash flow guidance for FY26 at $290–$330 million, with H2 weighted.

• BAU CapEx for FY26 guided at $380–$410 million; strategic CapEx ~$55 million.

• Dividend payout ratio set at 100% of FY26 free cash flow, subject to no material adverse change.

• Multi-year productivity benefits and cost-out target of $40–$50 million for FY26 remain on track.