CNU
25/02/2013 08:41
INTERIM
REL: 0841 HRS Chorus Limited (NS)
INTERIM: CNU: Chorus announces interim FY13 results
STOCK EXCHANGE ANNOUNCEMENT
25 February 2013
Chorus announces interim FY13 result
$84m NPAT and 10cps dividend for six months
Updated CAPEX guidance for FY13 and UFB communal CAPEX
Chorus Limited today reported its financial result for the six months to 31
December 2012.
The fixed line communications infrastructure company reported net earnings
before interest, tax, depreciation and amortisation (EBITDA) of $331 million
for the period, and a net profit of $84 million after tax (NPAT).
The company's sound underlying earnings result is attributed to good growth
in fixed line and broadband connections. Chorus reports growth of 10,000
fixed line connections to 1,793,000, and 36,000 new broadband connections to
total 1,076,000. There was also 50% growth in fibre connections to 15,000.
Chorus Chief Executive, Mark Ratcliffe said that this demonstrated New
Zealanders' demand for higher performing broadband services to meet their
developing online needs.
While Chorus' earnings result is pleasing, Ratcliffe also said that the
company faces challenging headwinds in its efforts to build New Zealand's
fibre future.
"While we have made progress and reduced deployment costs for about 90% of
our ultra fast broadband build areas, we did not anticipate the extreme costs
in the remaining 10% of areas. This is specifically because of the
significant variability in regional compliance requirements and civil work
that is driving up the cost per premises passed," he said.
As a consequence of higher than expected costs in its Ultra-Fast Broadband
(UFB) programme, Chorus updated its capital expenditure guidance:
o FY13 Gross CAPEX increased from $560-$610 million to $640-$690 million
o Total UFB communal CAPEX increased from $1.4-$1.6 billion to $1.7-1.9
billion
o FY13 average cost per premises passed increased from $2,500-$2,700 to
$2,900-$3,200
"We're on track to deliver fibre past 149,000 premises by 30 June 2013 and
continue to introduce a steady stream of initiatives to gain operational and
cost efficiencies across the UFB and RBI programmes. We are also rigorously
pursuing alternative deployment approaches in particular areas to address the
high cost of civil work," Ratcliffe said.
Fibre related investment, principally for UFB and the Rural Broadband
Initiative (RBI), accounted for $290 million of capital expenditure for the
six months, which is 85% of Chorus' gross capital expenditure for the six
months to 31 December.
The company also faced on-going challenges with the current regulatory
environment. Commenting on the recent Government announcement to bring
forward the regulatory framework review, Ratcliffe said; "This is a positive
step for the industry and for New Zealand, though there is a rigorous process
to go through before we know the final outcomes."
"We're seeking a clearer, more aligned regulatory environment that delivers
the right incentives to encourage the transition to our fibre network, and
help New Zealand realise the productivity and economic benefits UFB and RBI
can deliver," Ratcliffe said.
The Chorus Board approved a fully imputed interim dividend of 10.0 cents per
share to be paid on 12 April 2013.
Following the 8 February announcement from the Minister of Communications and
Information Technology, Chorus considers that it has sufficient near term
certainty to announce its FY14 dividend guidance of a fully imputed dividend
of 25.5 cents per share (subject to there being no material adverse change in
circumstances, operating outlook or Chorus' guidance for expected total UFB
communal build costs of $1.7 to $1.9 billion).
The Board currently expects to announce longer term dividend guidance when
the outcomes from the Government's reviews have been announced. At that
stage, Chorus will also have an updated view of how its capital expenditure
programmes are tracking.
Results summary for the six months ending 31 December 2012:
o Chorus achieved EBITDA of $331 million.
o Revenue has increased 2% to $525 million.
o Chorus will pay a fully imputed dividend of 10.0 cents per share.
o Gross capital expenditure was $341 million with 85%, or $290 million, spent
on fibre related projects.
o Fixed line connections increased by 10,000 to total 1,793,000.
o Continued growth in broadband with 36,000 new connections to total
1,076,000.
o Fibre connections increase of 50% to total 15,000.
Chorus Chief Executive, Mark Ratcliffe, and Chief Financial Officer, Andrew
Carroll, will discuss the interim results at a briefing in Wellington from
10.00am (NZ time). The webcast will be available at www.chorus.co.nz/webcast.
ENDS
For further information:
Brett Jackson, Investor Relations Manager
Mobile: +64 (27) 488 7808 / Email: [email protected]
Melanie Marshall, Head of Communications & Brand
Mobile: +64 (27) 452 6231 / Email: [email protected]
End CA:00233385 For:CNU Type:INTERIM Time:2013-02-25 08:41:31
