Chorus has reported a net profit after tax of $47 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $329 million for the half year ended December 31, 2017.
Operating revenue for the period was $499m and operating expenses were $170m. Depreciation and amortisation for the period was $192m, delivering earnings before interest and tax of $137 million.
Chorus CEO Kate McKenzie says the company now expects to track towards to the top end of the full year EBITDA guidance range provided.
“While the impact on revenue of lost lines from previous periods was apparent in the financial results this period, it was pleasing that the line loss trend showed signs of abating during the half,” says McKenzie.
“During the half year we continued our campaign to promote better broadband and this, coupled with an expanded field force, helped drive a strong increase in fibre and VDSL uptake while also slowing connection losses to other networks significantly.
“Ensuring line loss trends continue to improve will be strongly influenced by the improvements we continue to make in customer experience. For example, we are aiming to consistently deliver one day installs for fibre by the end of next financial year. We will also continue to be an active wholesaler, aiming to stimulate competition amongst retailers in the market."
Chorus is now underway with the implementation of a range of initiatives identified through the strategic review it undertook in the second half of the previous financial year.
“One of the major initiatives flowing from the strategic review was a new operating model for the company,” says McKenzie.
“Wider retailer adoption of automated fibre provisioning, together with other process improvements, has allowed us to review our internal structure with an expected 10% reduction in headcount now well progressed.
“As such, we anticipate further benefits to labour costs and other cost lines in the second half as we continue to focus on ensuring our cost base is sustainable. We also anticipate that improvements will have a commensurate positive impact on the customer experience.”
During the half year Chorus announced a further agreement with the Crown to extend its UFB rollout by another 54,500 premises.
In total, this means more than 87% of the population will have fibre available to them by 2022, with Chorus responsible for around 75% of that footprint.
In addition, Chorus is continuing to invest in the performance of its copper network. This includes a $20m programme to deploy VDSL vectoring technology in rural and other local fibre company areas, which has the potential to improve broadband performance for a further 260,000 premises.
“Chorus is investing around 60% of its revenues in rolling out fibre broadband infrastructure for New Zealand. In that context, certainty for investors is clearly of paramount importance, and we urge the Government to progress the legislation underpinning the sector’s regulatory framework,” MacKenzie adds.