Spark New Zealand Ltd.

Overview Key strengths Key risks Commitment to a conservative capital structure and disciplined financial policies. Limited rating headroom, though capital management actions could lower leverage. Well established position in New Zealand's telecom market that supports its business model. Competitive trends in mobile and broadband markets could erode market share and revenue over time. Consistent record of solid operating cash flow. Lumpy capital requirements for new technologies, mobile spectrum and to establish new earning streams. The company's leverage (ratio of adjusted debt-to-EBITDA) for fiscal 2024 (ended June 30) was 2.1x, well beyond our expectations of less than 1.7x for the rating. The company is taking a series of capital management and operating cost actions to reduce leverage to levels aligned with

...Spark New Zealand Ltd. is taking actions to lower leverage to levels commensurate with the current `A-` rating. The company's leverage (ratio of adjusted debt-to-EBITDA) for fiscal 2024 (ended June 30) was 2.1x, well beyond our expectations of less than 1.7x for the rating. The company is taking a series of capital management and operating cost actions to reduce leverage to levels aligned with the rating by the end of fiscal 2025. We expect these actions to offset the impact of Spark's downward earnings guidance for fiscal 2025. Spark's lower EBITDAI guidance highlights difficult operating conditions. The company has lowered its EBITDAI forecast for fiscal 2025 to NZ$1,120 million-NZ$1,180 million from NZ$1,165 million-NZ$1,220 million. The revision mainly reflects weaker mobile business earnings (lower...

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