Spark New Zealand Ltd Ord (NZTCF) Q4 2024 Earnings Call

Investor webinar replay

Replay transcript excerpt

Kia ora koutou katoa and thanks for joining us today for SPARC's full year results for the year ended 30 June 2024. I'm joined today by CFO Stephane Knight and as always we'll leave time for questions at the end of our presentation. As you know our FY24 financial results are cycling the significant revenue and net profit declared in FY23 following the Taoko and SPARC sport transactions. As such both reported and adjusted year on year comparisons are provided. I'll speak to the adjusted numbers which strip out the impact of the one-off gain to provide a like-for-like performance comparison. It's fair to say it's been a challenging year for Spark with recessionary economic conditions creating a tough operating environment. We saw growth in key markets with mobile service revenues surpassing a billion dollars for the first time and IT products, data centres and high tech continuing to grow. This was offset as economic conditions impacted demand in IT services. which were intensified competition of business mobile and led to lower mobile device and accessory sales. As a result, adjusted revenue decreased 1.2% to $3.861 billion. We accelerated our Spark 26 operate program in half two, but could not adapt the cost base to changing demand quickly enough, with benefits to be largely realized in the FY25. As a result, FY24 adjusted EBITDA reduced 2.5%, to $1.163 billion. Lower EBITDA, higher finance expenses and high depreciation impacted adjusted MPAT, which declined 21% to $342 million. Free cash flow reduced 32.5% to $330 million as a result of lower EBITDA and higher interest and non-cash earnings and contributed to high net debt. This was a disappointing outcome. But as we look to the year ahead, our business fundamentals remain strong. We've got a clear path to return t...