Chorus CEO Kate McKenzie to step down
- 26 August, 2019 06:44
Kate McKenzie (Chorus)
Kate McKenzie, Chorus CEO and managing director, will step down from leading the ultrafast broadband network company at the end of 2019.
McKenzie was appointed CEO in December 2016.
“With the announcement of Chorus' full year results today, Kate has advised the Board of her intention to return home to Australia at the end of the year,” said Chorus chair Patrick Strange.
“The board has been considering succession planning for some time, and the process to appoint a successor is underway."
Chorus was well placed to take advantage of the opportunities ahead as it moves from building the fibre network to operating it, thanks to her tenure and leadership, Strange said.
"We are sorry to see her go but understand her desire to spend more time with her Sydney-based family. She will leave with our very best wishes and thanks for a job well done."
McKenzie remained focused on maintaining the progress made to date, while her successor is selected, Strange said.
Chorus today reported earnings before interest, tax, depreciation and amortisation $636 million for the year ended 30 June 2019, in line with guidance.
Operating revenue for the period was $970 million, down from $990 million in 2018 while operating expenses were $334 million, down from $337 million.
Earnings before interest and tax (EBIT) of $243 million was also down from $266 million, while net profit after tax was $53 million, reflecting reduced revenue and the increased interest costs of borrowing to fund the UFB rollout.
“When Chorus signed up to the original UFB project with the Government in 2011 we had a target of 20 per cent for fibre uptake by 2020," McKenzie told shareholders today.
"We’ve well and truly smashed that target."
Fibre uptake within Chorus' UFB areas, which include most of the country, grew from 45 per cent to 53 per cent.
"That is all the more impressive when you consider we built the network past another 176,000 homes and businesses during 2019," she said.
McKenzie's leadership led to a transformation at Chorus delivering material improvements in efficiency and customer experience, chair Strange said.
Nearly three quarters of fibre installations are now completed in a single technician visit, which avoids the need for a separate scoping visit, and reduces the effort required from customers to get their fibre connected.
Overall customer satisfaction has increased significantly and Chorus technicians were consistently rated as the most positive component of the overall fibre ordering and installation experience.
However, her time was also blighted by "systemic failures" that contributed to a contractor abuse scandal in Chorus' supply chain.
Demand for fibre has continued to grow, with a record 33,000 orders in July 2019 and Chorus has lifted the volume of fibre connections delivered from around 12,000 monthly in June 2016 to more than 26,000 in July 2019.
In addition, in 2019 Chorus completed its peak Ultra-fast Broadband communal build year on time and on budget.
The initial Ultra-Fast Broadband programme will be completed by the end of 2019.
“The great progress with fibre has provided Chorus with an outstanding platform for sustainable success, and we are on track to deliver modestly increasing EBITDA in 2020,” said McKenzie.
“As we complete the once in a generation fibre network build and begin the process of decommissioning the copper network over the coming years, our capital expenditure commitments will reduce markedly and we will therefore see a commensurate improvement in cashflows.
“I am most proud of the culture change at Chorus. The company is now more innovative and customer focused, and it is well set up to thrive as it transitions into its next phase following the completion of the fibre network build.
"I am also extremely proud of the talented executive team we have built who I am certain will continue to take Chorus forward.”