3 Min Read
(Adds market reaction, statement from rival Sky Network Television)
WELLINGTON, Feb 16 (Reuters) - Telecommunications company Spark New Zealand Ltd reported a 12.6 percent rise in half-year net profit on Thursday, weathering increased competition in the mobile market.
The company said it was on track to meet its guidance for earnings growth of 1 percent to 2 percent this year before interest, tax, depreciation and amortization.
Spark, New Zealand's largest provider of mobile phone services, said revenue from its cellphone services rose 4.1 percent in the six months through December to NZ$588 million ($424 million), but warned that the market was highly competitive.
"It is clear the intense ongoing price competition, particularly at the lower end of the market, is driving margin pressure and reinforcing the need for us to increase our focus on this market," Chairman Mark Verbiest and Managing Director Simon Moutter said in a joint statement.
Shares in Spark fell 3.2 percent after the earnings announcement, despite meeting expectations, which fund managers said was likely due to investors taking profits after buying up shares ahead of the results. The shares had gained 3.5 percent in the last week to close at a five-week high on Wednesday.
The company said its net profit for the six months to Dec. 31 was NZ$178 million, up from NZ$158 million a year earlier.
Earnings per share of NZ$0.097 slightly beat analyst expectations of NZ$0.09.
Spark will pay an interim dividend of NZ$0.11 per share and a special dividend of NZ$0.15 per share, the same payout as a year ago.
The company announced it would spend NZ$515 million this year on previously unplanned work to fix damage from the large earthquake that hit New Zealand in November.
Also on Thursday, Sky Network Television said in a stock exchange statement that if it gets regulatory clearance to buy Vodafone's New Zealand unit, it will not give rival Spark time to challenge the regulator's decision in court, as requested.
The Commerce Commission is due to rule on the proposed NZ$1.3 billion ($938 million) takeover on Feb. 23 and has previously cited concern the deal would dampen competition from rival broadband and mobile providers.
The deal was unlikely to affect Spark's full-year 2017 results, according to analysts. ($1 = 1.3873 New Zealand dollars) (Reporting by Charlotte Greenfield; Editing by Susan Fenton and Tom Brown)