Revenue edged up 1% to $1.03 billion.
An unimputed second-half dividend of 36c per share was declared, taking the full-year payout to 60cps, meeting Chorus’ forecast.
Guiding to higher dividend
Chorus guided to FY2027 ebitda between $730m and $760m and a partially-imputed full-year dividend of “a minimum of 62cps”.
Chief executive Mark Aue said the result demonstrated the resilience of Chorus’ business model and the deliberate action taken across the business to manage costs in a challenging macroeconomic and geopolitical environment.
Since it completed the capital-intensive Ultrafast Broadband (UFB) build, Chorus has simplified its business and increased its dividend, which stood at 25cps in 2021, the final year of the fibre rollout.
Copper recycling windfall
Chorus said a pilot to recover and recycle redundant copper cables brought in a net $4m.
Chorus now estimates it will make $50m to $70m over three to seven years from copper recovery, Aue said on a conference call.
Chorus is due to end its final copper service at the end of 2028.
Where will new business come from?
Crozier said he would be looking for an update on Chorus’ non-regulated growth opportunities after it had shown “discipline” in ultimately turning down opportunities to invest in internet-of-things (IoT) play Neura and Datagrid’s Tasman Ring Network (a project that the Southland “AI factory” maker has now taken inhouse as it pursues funding for a scaled-down version of its international fibre cable).
With its UFB business subject to a Commerce Commission-enforced revenue cap and anchor pricing, Chorus has been probing for new opportunities.
A multi-billion proposal to extend fibre to rural areas got the cold shoulder from Communications Minister Paul Goldsmith amid the Government’s tight finances and the rise of Starlink as a rural DIY alternative.
AI driving ‘structural shift’
On today’s conference call, Aue said AI was driving a “structural shift” in the way we use the internet.
“While our network traffic today remains predominantly download-led, with downloads accounting for 87% of usage and uploads 13%, we are already seeing upload traffic grow faster, signalling a structural shift in how networks are used.”
Aue sees fibre being more suited than fixed-wireless to the upload-intensive AI age. Retailers Spark, One NZ and 2degrees have used fixed-wireless to cut Chorus out of the loop. Spark’s full-year result saw a fall in its fixed-wireless connections.
Data centre opportunity
The Chorus CEO said the data centre boom provided another opportunity for growth. He said his company’s Express Connect service is now available at eight locations, including CDC and Datacom data centres, giving companies faster, more stable direct connections, with more coming in FY2027.
And although Tasming Ring participation was shelved, Chorus is now investigating a possible cable linking the North Island and South Island.
Chorus finished the financial year with 750 employees, according to its annual report, steady with last year’s 755 but down on the 846 it reported for FY2024.
Ahead of today’s earnings, Crozier had a neutral rating and $9.95 12-month target.
Shares closed Friday at $9.56.
Matthews exits stage left
TelstraSaturn co-founder Jack Matthews, who joined the board in 2017, announced he would step down on October 28.
The board is seeking nominations to replace him.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
