Spark New Zealand (ASX:SPK), the largest telecommunications and digital services provider in the country, revised its FY25 guidance, lowering EBITDAI (earnings before interest, tax, depreciation, amortisation, and investment income) to NZ$1,120-$1,180m, with capex reduced to NZ$415-$435m and a dividend cut to 25 cents per share. Spark attributes this move to subdued economic activity, citing weak consumer spending and low business investment impacting its mobile and IT segments.
The company also announced an expansion of its SPK-26 Operate Programme to achieve deeper cost reductions, intending to counter market pressures while boosting free cash flow, which remains targeted at NZ$400-$440m. Spark plans to streamline its portfolio, including a divestment of its stake in Connexa, a mobile towers business.
"Our current financial performance falls short of what is acceptable," said Chair Justine Smyth, acknowledging shareholder concerns. CEO Jolie Hodson added, “We’re confident that these adjustments, alongside our SPK-26 Operate Programme, will help us navigate current pressures and position Spark for long-term growth.”
The company sees its data centre strategy and potential capital partnerships as long-term growth avenues.
