Spark New Zealand (SPK) H2 2025 earnings summary

Executive summary

• FY25 was challenging, with lower customer spending and a tough economic environment, but results were delivered within updated guidance, meeting targets for revenue, EBITDAI, and dividends.

• A significant transformation program was executed, including cost reduction, portfolio simplification, and a new five-year strategy (SPK-30) focused on core connectivity and long-term shareholder value.

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

Financial highlights

• Adjusted revenue declined 4.2% year-over-year to $3,700m (NZD 3.7 billion); reported revenue was $3,725m, down 2.5%.

• Adjusted EBITDAI fell 8.9% to $1,060m, impacted by lower IT services activity and supply cost inflation, partially offset by labor cost reductions.

• Adjusted NPAT dropped 33.6% to $227m; reported NPAT was $260m, down 17.7%.

• Free cash flow was steady at $330m; capex reduced 17.2% to $429m.

• Total FY25 dividend declared at 25 cents per share, in line with guidance.

Outlook and guidance

• FY26 adjusted EBITDAI guidance: $1,010–$1,070m (excluding data centre gain on sale).

• BAU capex expected at $380–$410m; strategic/data centre capex $50–$70m in H1 2026.

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

• ROIC targeted at 11–13% by FY30, up from 8.7% in FY25.