A $25 million Covid-19 hit failed to derail Spark. The company met its earnings guidance for the 2020 financial year. Spark saw a 2.5 percent increase in revenue and a 4.4 percent rise in net profit. Ebitda was up 2.1 percent.
Spark says the pandemic all but wiped out mobile roaming revenue in the second half. The company’s retail stores fell with many outlets closed during lockdowns. Waiving excess data fees on capped plans and not charging Spark Sport customers when there were few live events also cut revenue.
On the plus side Spark saw increased demand for mobile. Revenue was up 3.9 percent at $840 million. The company says the growth was, in part, down to uncapped mobile data plans. The number of customers on these plans tripled during the year. Spark says its mobile market share climbed one percent in the year.
Broadband revenue was flat at $680 million. Intense price competition makes progress hard in this sector. Voice revenue continued its long-term decline dipping 11.3 percent to $443 million.
Looking ahead, Spark CEO Jolie Hodson warns that the company expects Covid-19 to wipe a further $75 million off the bottom line in 2020. Despite this she says there will be no let up in Spark’s capital expenditure. This includes rolling out 5G mobile.
Chorus reported a one percent fall in revenue for the 2020 year, down from $970 million to $959. Ebitda was up two percent at $648 but still below the 2019 figure.
The network operator saw operating expenses and capital expenditure fall during the year. This was because the first stage of the UFB fibre roll out finished. The lockdown also saw a halt to non-essential network build and connection activity.
Net after tax profit came in at $52 million, two percent down on 2019’s $53 million. During the year active fibre connections on the Chorus network climbed from 610,000 to 751,000. That’s a rise of almost 25 percent.
The main threat facing Chorus investors in coming years is regulatory. Soon the Commerce Commission will make a final decision on the regulatory regime that will affect the return the network company will earn on its investments.