Spark New Zealand Limited

Adjusted revenue was stable at $3.7 billion. Adjusted EBITDA declined 2.4% to $1.035 billion, adjusted NPAT declined marginally to $225 million, and free cash flow increased 18.5% to $308 million. Reported EBITDA was $1,295 million, up 23% year on year, and reported NPAT was $499 million, up 91.9%, reflecting the $278 million gain on sale of the data center business. Mobile revenue increased 4.4% to $1.5 billion and mobile service revenue returned to growth, up 1.1% to $998 million. Broadband connections declined 4.9%, business connectivity revenue declined 9.9% to $327 million, and digital services revenue declined 3.4% to $372 million. Capex was flat at $401 million, or 10.8% of adjusted operating revenue. Net debt returned to around 1.7x EBITDA, with core net debt reduced 35% to $898 million. For FY '27, Spark guided to adjusted EBITDA of $1,010 million to $1,080 million, BAU CapEx of $350 million to $380 million, free cash flow of $300 million to $350 million, and a dividend of $0.16 to $0.18 per share.

Jolie Hodson framed FY '26 as the first year of SPK-30 execution and said Spark is building momentum by refocusing on core connectivity, growing mobile, and simplifying beyond the core. She emphasized that the company finished within guidance, improved free cash flow, and returned net debt to target levels after the data center transaction. Her tone was constructive but measured, repeatedly noting that the operating environment remains subdued and that further EBITDA growth will depend on mobile momentum, productivity gains, and portfolio simplification.

Stewart Taylor highlighted the reported-versus-adjusted bridge, noting reported EBITDA of $1,295 million included the $278 million data center gain on sale, while adjusted EBITDA of $1.035 billion removed that gain and included the data center earnings up to the sale date. He said business-as-usual CapEx was $401 million, flat year on year and equal to 10.8% of adjusted operating revenue, while free cash flow rose 18.5% to $308 million due mainly to lower cash interest and tax, plus working-capital improvement. He also cited $40 million in FY '26 productivity benefits, cumulative cost reductions of $101 million, net debt-to-EBITDA of around 1.7x, and FY '27 guidance for adjusted EBITDA, CapEx, free cash flow, and a 90% to 100% payout ratio.

Analysts pressed management on whether enterprise and government mobile ARPU declines would continue to moderate; Jolie said the sharpest reset is mostly behind them and expects some decline in FY '27, but not for another 3 to 4 years, with the bulk of the adjustment completed by the end of FY '27. Questions also focused on the July consumer mobile price increase, where Jolie said churn has been below expectations and the increase was around $3 per month on average for most pay-monthly plans. On broadband, management said fixed wireless weakness was a combination of competition and some rural migration, but Spark still sees growth potential and plans a more competitive FY '27 relaunch. The DRP was also questioned; Stewart said it is being reinstated partly because retail investors wanted it and partly to preserve balance-sheet flexibility, with no discount on issue price.