Chorus reports strong half-year results amid CEO transition

Chorus has reported a robust financial performance for the six months ended 31 December 2023, with fibre broadband demand driving the company's evolution towards a simpler digital infrastructure. The financial report came with an announcement of a leadership transition, with the current CEO, JB Rousselot, due to step down in April 2024, to be succeeded by Mark Aue.

The period's key results highlight an increase in fibre connections by 31,000 to a total of 1,062,000, and a rise in fibre uptake to 70.6%. Additionally, 25% of residential fibre connections are now on gigabit or higher plans. The operating revenue reached $503m, up from $487m in HY23, and EBITDA increased by $5m from the prior period, standing at $347m. Meanwhile, the net profit after tax was $5m, down from $9m in HY23.

Rousselot mentioned that the growth in fibre uptake has been essential in Chorus' evolution. "Over the last 12 months, copper connections dropped by 94,000, and fibre grew from 78 per cent of Chorus' connections to 85 per cent. This shift has seen network fault volumes drop by 15 per cent, and we expect these fault volumes to fall further as we look to fully retire copper in urban fibre areas by the end of 2026," he stated.

Chorus has begun extending fibre to 10,000 more homes and businesses, in the first expansion of New Zealand's fibre network since the completion of Ultra-Fast Broadband (UFB) in December 2022. Rousselot noted, "About 60 per cent of the homes and businesses we intend to pass are not on the Chorus network, and a pre-registration initiative has shown strong interest in connecting to fibre."

Reflecting on the leadership transition, Mark Cross, Chair of Chorus, expressed his gratitude to Rousselot, who had "fully embraced New Zealand's culture during his time" and had led Chorus through its most significant test, COVID-19. Cross also welcomed Aue as the new CEO, stating that Aue's deep understanding of Chorus and the telecommunications industry, plus a proven leadership track record, make him ideal for leading Chorus into its next chapter.

Ahead of the succession, the company announced an unimputed interim dividend of 19 cents per share to be paid in April 2024. Chorus completed its $150 million share buyback in the year's first half, with about 19 million shares cancelled through the buyback.

From January 2025, Chorus' next four-year regulatory period will start, having lodged its approximately $1.3 billion expense proposal in November. The Commerce Commission's draft decision on the proposal is anticipated soon, with the final decision expected in the second quarter of the calendar year.