Chorus lifted annual profit 24 per cent after cutting costs and changing the way it capitalises some labour costs, making up for a decline in connection numbers that's been driven by the network operator's biggest customer, Spark New Zealand.
Net profit rose to $113 million, or 23 cents per share, in the 12 months ended June 30, from $91m, or 19 cents, a year earlier, the Wellington-based company said in a statement. Revenue edged up 3 per cent to $1.04 billion as the network operator benefited from an increase in regulated prices on its copper lines, while expenses fell 6.7 per cent to $388m. Earnings before interest, tax, depreciation and amortisation rose to $652m from $594m a year earlier.
"Chorus's financial results for 2017 were underpinned by a strong focus on costs as we streamlined copper provisioning processes and began capitalising labour expenses relating to certain fibre provisioning costs," the company said in a statement.
The network operator got some relief from the Commerce Commission in late 2015 when the regulator decided to wind back some of the price reductions it planned to enforce for the network company's copper infrastructure. Still, since then it's faced increasing competition from Spark, which has been marketing its fixed wireless broadband as a viable alternative to the network in an effort to cut its reliance on Chorus and trim its own expense line.
That's eroded Chorus's customer numbers, with total fixed line connections falling 7 per cent to 1.6 million and its broadband connections down 3 per cent to 1.19 million.
