Chorus FY21 mixes GPON crescendo with copper diminuendo
Chorus, which happily describes itself as New Zealand's "biggest infrastructure company," posted a steady set of financials for its 2021 fiscal year ended June 30.
Although the wholesale company has seen strong surges in broadband usage over its network, particularly in times of national lockdown – New Zealand is currently battening down the hatches once again as a precaution against the Delta variant of the coronavirus – it hasn't translated into a spectacularly positive impact on FY21.
As a result of what Chorus called "softer market conditions due to the ongoing effects of COVID-19 on broadband demand," as well as competition from other fiber and wireless networks, operating revenue dipped by NZ$12 million (US$8.2 million) year-on-year to NZ$947 million ($651 million).
Around half of Chorus' FY 21 turnover (NZ$477 million/$328 million) was generated from GPON, which was up from NZ$393 ($270 million) during FY20. Gigabit connections accounted for 19% of Chorus' fiber connections as of June 30, up from 16% a year ago. Revenue declines from copper-based broadband products nonetheless offset GPON gains.
However, because of what Chorus insisted was "continued tight management of costs," and the fact it didn't have to stump up one-off COVID 19 related costs as it did in FY20, EBITDA held steady at NZ$649 million/$446 million (NZ$648 million in FY20).
Net profit after tax was NZ$47 million ($32.3 million), down NZ$5 million ($3.4 million) compared with FY20.
UFB wins Chorus of approval
Rollout and take-up of ultra fiber broadband (UFB) was given prominence by Chorus in its FY21 presentation.
As of June 30, UFB rollout was 95% complete. Only 53,000 premises remain to be passed to achieve its rollout target that was originally set for December 2022. And with 871,000 active fiber connections, up 120,000 compared with 12 months previously, UFB take-up stood at 65% at the end of FY21.
Chorus is guiding for FY22 EBITDA of between NZ$640 million ($440 million) and NZ$660 million ($454 million), on the assumption that regulatory and competitive dynamics remain the same. No specific allowance was made in EBITDA guidance for "extended COVID-19 related lockdowns." Capital expenditure is pegged at between NZ$550 million/ $378 million and NZ$590 million/$406 million (NZ$672 million/$462 million during FY21).
Chorus said it will pay a final dividend of 14.5 cents per share, fully imputed, on October 12. It brings total dividends for FY21 to 25 cents per share. FY22 initial dividend guidance is 26 cents per share.
— Ken Wieland, contributing editor, special to Light Reading
