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Chorus reports "solid operating" performance underpinned by cost focus and broadband growth

Chorus reports "solid operating" performance underpinned by cost focus and broadband growth

“This represents another period of solid operating performance by Chorus..."

Chorus Limited has today reported a net profit after tax (NPAT) of $64 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $321 million for the six months ended 31 December 2014.

Operating revenue for the period was $527 million and operating expenses were $206 million while depreciation and amortisation for the period was $159 million, delivering earnings before interest and tax (EBIT) of $162m.

“This represents another period of solid operating performance by Chorus, underpinned by stable fixed line connection numbers, continuing broadband growth and the ongoing focus on initiatives to address the regulatory price cuts from 1 December 2014,” says Mark Ratcliffe, CEO, Chorus.

“A large number of revenue, operating cost and capital expenditure initiatives have now been implemented and Chorus will continue to limit discretionary spending.

“Chorus has invested more than $1.7 billion in fibre networks and capability since it was established in 2011, with about half a million end-users now within reach of better broadband through our UFB and RBI rollouts.”

Ratcliffe says Chorus has now agreed fixed price UFB deployment contracts with Visionstream and Downer covering about 90 percent of its rollout areas, providing Chorus with additional certainty on deployment costs through the remainder of the UFB deployment period.

Consequently, Ratcliffe says this has enabled Chorus to narrow its previous $1.70 to $1.90 billion guidance range for UFB communal costs to a new range of $1.75 to $1.80 billion.

Operating performance

According to figures, total lines increased by 5,000 during the period to 1,782,000, fibre connections increased by 55% to 65,000 and total broadband connections increased by 23,000 to 1,186,000.

Retail service providers are offering services more widely across the UFB footprint and this has fostered ongoing growth in fibre connections, although uptake varies widely from area to area.

Approximately 38 percent of Chorus’ UFB rollout is complete, meaning 421,000 end-users are now within reach of Chorus UFB, with Ratcliffe claiming the Rural Broadband Initiative has enabled better broadband for more than 81,000 rural fixed lines.

Increased fibre uptake is driving additional capital expenditure demands, with FY15 gross capital expenditure now expected to be $625 to $650 million, based on updated connection capital expenditure estimates.

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