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ASX-listed telecom company Chorus’ spending plans have been hit due to COVID-19 disruptions.
The telco now expects FY22 capex to be within a range of NZ$480 million to NZ$500 million.
However, the company’s EBITDA guidance remained unchanged.
Chorus Ltd (ASX:CNU) has slashed its spending plans for the fiscal year 2022 due to disruptions caused by the COVID-19 pandemic. The New Zealand-based telecommunications infrastructure company now expects FY22 capital expenditure to be within a range of NZ$480 million to NZ$500 million.
The spending was in the range of NZ$520 million to NZ$560 million in the previous guidance announced as part of the half year results in February.
“[Updated guidance reflects] the ongoing constraints COVID has had on fibre installations and other network investment activity,” Chorus said in an ASX filing on Friday.
However, the company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) guidance for fiscal year 2022 remained unchanged within the range of NZ$665 million to NZ$685 million.
“Consumer demand for new fibre connections remains strong with Chorus continuing to promote the activation of pre-installed fibre connections. Managed migration campaigns have been reoriented to focus on areas where fibre has been recently deployed, or where copper services are in the process of being withdrawn,” Chorus added.
The ASX-listed telco is scheduled to release its Q4 connections update in early July 2022.
Chorus’ share price snapshot
By 10:05 AM (AEST), Chorus’ shares were trading at AU$6.44, down 0.46%. The share price is down over 6% on a year-to-date (YTD) basis. In the past one year, the shares have risen over 6.6%. The share price fell 0.16% in the past month.
Chorus’ half-year results
For the six months ending 31 December 2022, Chorus’ revenue rose by 1% to NZ$483 million on account of gains from its ongoing network optimisation programme.
The telco’s EBITDA surged 5.8% to NZ$347 million and its net profit after tax (NPAT) climbed 56% to NZ$42 million.
The company’s management also increased its FY2022 dividend guidance to 35 cents per share from 26 cents per share. Chorus expects to pay dividends of at least 40 cents per share in FY2023 and 45 cents per share in FY2024. The company’s board announced an interim dividend of NZ$0.14 per share.
Meanwhile, the company, in May 2022, announced amendments to the syndicated bank facility of NZ$350 million. Its maturity date has now been extended to April 2025 from April 2024. The extension would provide additional financial flexibility as well as funding certainty to the telecom company.
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