Chorus reports first seven months' results

Chorus's inaugural financial results show a net profit of $102 million

Chorus has reported its inaugural financial results for the seven months to 30 June 2012, following its establishment as a standalone company on 1 December 2011.

The company made a net profit after tax of $102m on earnings before interest, tax, depreciation and amortisation (EBITDA) of $399m.

Earnings before interest and tax (EBIT) were $210 million. The result includes unusual income of $11 million relating to insurance claims from the Canterbury earthquakes.

The Chorus board has approved a final dividend of 14.6 cents per share to be paid on 5 October 2012. The dividend will be fully imputed with a supplementary dividend paid to non resident shareholders. The board anticipates Chorus will pay a fully imputed full year dividend of 25.5 cents per share for financial year 2013, subject to there being no material or adverse changes in circumstances or operating outlook over that period.

CEO Mark Ratcliffe says the result reflects a pleasing start to Chorus’ operations as a publicly listed company.

“We’ve focused on supporting our customers during what is a period of complex industry transition and it has been good to see their success in adding about 50,000 broadband connections to the network,” he says.

“Our rollout of the ultra-fast broadband network is also gaining momentum with about 57,000 end users already within reach and we’re working closely with our customers to facilitate the transition to fibre as this network continues to grow.”

“While fibre demand is uncertain, there are early signs that it is emerging. We’ve begun, for example, to see new growth in demand for our high grade business fibre service following the introduction of UFB pricing.

“While fibre prices are set and provide certainty, copper pricing remains highly uncertain at a time of significant transition for the industry and significant investment through public private partnerships,” Ratcliffe says. A pending Commerce Commission decision is thought likely to regulate the price of copper access downwards, impacting Chorus’s bottom line for the future.

“This means the regulatory framework and pending regulatory processes remain central to how incentivised or aligned the industry will be in making choices that support the Crown’s UFB policy. We continue to remain highly engaged with the Commerce Commission in the regulatory processes”, Ratcliffe says.

A decision is also awaited on how much of the cost of linking premises to UFB will fall to Chorus and how much will fall to the retail service provider.

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