Spark New Zealand earnings: profit rebounds, dividend declared

The Spark New Zealand Ltd (ASX: SPK) share price is in focus today after the company reported a strong half-year result, with EBITDAI up 10.3% to $448 million and net profit rising 82.9% to $64 million.

What did Spark New Zealand report?

• Reported H1 FY26 revenue of $1,893 million, down 1.2% on H1 FY25
• Adjusted revenue (including data centre business) of $1,917 million, down 1.1%
• Reported EBITDAI of $448 million, up 10.3%, and adjusted EBITDAI of $471 million, up 5.1%
• Net profit after tax of $64 million, up 82.9%; adjusted NPAT of $73 million, up 30.4%
• Free cash flow rose 84% to $107 million
• Interim dividend of 8 cents per share declared, 50% imputed

What else do investors need to know?

Spark’s mobile service revenue grew by 1.6% to $499 million, with the strongest growth coming from higher value post-paid plans. Broadband revenue also nudged up by 0.3%, while cloud revenue increased 1.7%. However, ongoing declines were seen in legacy voice services and other connectivity revenue, mainly due to the Digital Island divestment and customers moving off older products.

The company completed the sale of a 75% stake in its data centre business (‘TenPeaks Data Centres’) at the end of January, receiving $453 million in cash and potential further deferred proceeds, aiming to reduce net debt in the second half. Spark also launched a new financing partnership for handset payment plans and emphasised its continued investment in 5G, customer experience, and AI projects to support growth and improve efficiency.

What did Spark New Zealand management say?

Spark CEO Jolie Hodson said:

Today’s result shows that focused execution in the first six months of our new five-year strategy is building momentum. Mobile remains central to our SPK-30 strategy, and we have delivered a return to revenue growth and ongoing connection stabilisation. Our strategic focus on delivering a better network and better customer experiences is central to our success, and we were pleased to maintain network coverage leadership off the back of more than 100 cell site upgrades and new builds during the half.

What’s next for Spark New Zealand?

Spark reaffirmed its full-year FY26 guidance, expecting adjusted EBITDAI between $1,010 million and $1,070 million, and free cash flow of $290 million to $330 million (subject to no material changes in outlook). BAU capital expenditure is forecast at $380 million–$410 million, with an additional $55 million of data centre strategic capex. The company will pay out 100% of free cash flow as dividends for FY26.

In the coming months, Spark plans more than 100 additional mobile site builds and upgrades, new roaming products, and the launch of satellite-to-mobile services. Management remains focused on cost discipline, digital transformation, and sustainability—highlighted by progress on emissions and expanding social connectivity through products like Skinny Jump.

Spark New Zealand share price snapshot

Over the pat 12 months, Spark New Zealand shares have declined 30%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

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The post Spark New Zealand earnings: profit rebounds, dividend declared appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.