Chorus profit plummets 36 per cent

According to CEO, objective is to return to modest EBITDA growth in FY20

Credit: Chorus

Chorus has reported net profit after tax for the six months to 31 December of $30 million, down from $47 million in the same period last year.

Meanwhile, revenue was down $10 million from $499 million to $489 million and EBITDA down 3.3 per cent to $318m.

In its results announcement the company made no comment on the NPAT decline, instead CEO Kate McKenzie focussed her comments on demand for Chorus fibre, saying this continued to surge and that the business was starting to see improvements in customer satisfaction with the fibre installation experience.

"We recorded our highest ever customer satisfaction score of 7.9 out of 10 in December, up from 7.5 in June," McKenzie said.

McKenzie said Chorus' objective was to return to modest EBITDA growth in FY20, subject to no material changes in expected regulatory environment or competitive outlook.

In addition, the company's EBITDA guidance for the full year to 30 June 2019 is unchanged at $625 million - $645 million and gross capex guidance is unchanged at $820 million - $860 million.

However it has increased expected capex on fibre to $685 million - $715 million from $660 million - $690 million and on fibre connections and layer 2 capex to $310 million - $340 million from $280 million - $310 million previously.

As of 31 December 2018, Chorus had 981,000 customers able to connect to its UFB fibre and 504,000 connected customers, while UFB fibre ran past a further 738,000 premises.

However copper based broadband services remained the largest contributor to Chorus revenues, at $181 million, but down from $219 million in the half year to 31 December 2017. Fibre broadband services accounted for $136 million however, up from $90 million in H1FY18.

Overall capex on fibre network infrastructure in the half year was $331 million, up from $301 million in H1FY18 - the figure included $8 million ($5 million H1FY18) on "targeted RSP campaigns to drive fibre uptake and win back off-net connections."

Delving deeper, the cost per premises passed to rollout fibre in the UFB1 areas was $1,662 ahead of guidance of $1500-$1600.

Meanwhile, data usage on the Chorus network continues to grow rapidly. The average across copper and fibre services has doubled to 235GB per month at 31 December and Chorus expects average data volumes on its fibre network to reach 1TB per month by mid 2023.

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