Spark Earnings Rise for FY17

By Ben Collins Features Dow Jones Newswires

WELLINGTON, New Zealand--Telecommunications group Spark New Zealand Ltd. (SPK.NZ) reported a rise in net earnings for the year ended June 30, after progress in its goal to transition to a digital company.

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Spark said its net earnings after tax for the year were 418 million New Zealand dollars ($267 million), up 13% on the previous year. Earnings before interest, tax, depreciation and amortization were up 3% at NZ$1.01 billion.

Its second-half dividend of 12.5 NZ cents takes the total payout for the fiscal year to 25 NZ cents, and the company said it expects to pay the same amount for 2018, as long as there's no adverse change in its operating outlook.

The company's Chairman Mark Verbiest, who will retire later this year, said the increase in earnings was pleasing but that costs were up, "reflecting higher short-term costs needed to successfully address customer service challenges experienced last winter and to manage the workload arising from strong growth in Telecommunications-as-a-Service and IT service contract wins."

"In addition, there were costs related to the large-scale migration of customers off copper to wireless or fibre, and from Yahoo to SMX email," he said.

Spark has made a wave of investments in digital products in recent years, including the purchase of cloud-services provider CCL Group and the deployment of New Zealand's first 4.5G mobile site. Management have also overhauled its customer IT systems and in December took full control of the Connect 8 fiber construction business by buying out Australian partner Vocus Communications Ltd. (VOC.AU).

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Spark's net debt increased by NZ$117 million during FY17, but declined by NZ$16 million during the second half due to divestment proceeds and improved cash conversion, it said.

Write to Ben Collins at ben.collins@wsj.com

(END) Dow Jones Newswires

August 17, 2017 17:33 ET (21:33 GMT)