Spark New Zealand (ASX:SPK)the country’s largest digital and telecom services provider, has revised its guidance for fiscal year 25, lowering EBITDAI (earnings before interest, taxes, depreciation, amortization and investment income) to 1,120-1,180 million NZ dollars, with capital expenditure reduced to NZ$415-435 million. and a dividend cut to 25 cents per share. Spark attributes this move to subdued economic activity, citing weak consumer spending and low business investment impacting its mobile and IT segments.
The company also announced an expansion of its SPK-26 Operate program to achieve deeper cost reductions, with the intention of countering market pressures while simultaneously increasing free cash flow, which remains targeted at 400- 440 million New Zealand dollars. Spark plans to rationalize its portfolio, including divesting its stake in Connexa, a mobile tower company.
“Our current financial performance is below what is acceptable,” said chairman Justine Smyth, acknowledging shareholder concerns. CEO Jolie Hodson added: “We are confident that these adjustments, along with our SPK-26 Operate program, will help us overcome current pressures and position Spark for long-term growth.”
The company views its data center strategy and potential capital partnerships as long-term growth avenues.