Full Year 2026 Chorus Ltd Earnings Call Transcript
Key Points
- Chorus Ltd (CHRYY) delivered a strong financial performance in FY26, with EBITDA increasing 3% to NZD726 million and net profit improving significantly to NZD37 million.
- Fiber connections grew by 3% to over 1.1 million, with fiber revenue up 6%, and the company is making progress on its goal of reaching 80% fiber uptake in major urban areas.
- The company is successfully executing its copper retirement strategy, with fewer than 1,000 copper lines remaining in fiber areas and a fully operational copper recycling program contributing NZD4 million in EBITDA.
- Chorus Ltd (CHRYY) is expanding its infrastructure portfolio with new products like Express Connect, Unified Transport, and TimeSync, and is exploring growth opportunities in subsea cables and battery energy storage.
- The company maintains a strong balance sheet with a Baa2 credit rating and is guiding to a higher dividend of NZD0.62 per share for FY27, reflecting confidence in its long-term outlook.
- Chorus Ltd (CHRYY) is well-positioned for the AI era, with a fiber network that is already built for high-capacity, low-latency connectivity, and it is seeing growing demand from data centers and AI applications.
- Chorus Ltd (CHRYY) faces ongoing inflationary pressures, particularly in non-tradable costs such as rent, rates, and electricity lines charges, which are partially offsetting efficiency gains.
- The company's copper business is declining rapidly, with copper connections down 52% and revenue down 45%, and it expects copper revenue to fall to the high teens of millions in FY27.
- The sale of NIFFCo's securities to institutional investors could lead S&P to treat NZD683 million of equity securities as debt, increasing the company's leverage ratio to approximately 5.5 times debt to EBITDA.
- The company's effective tax rate remains high at 46% due to permanent differences from Crown project funding grants, which impacts net profit.
- Chorus Ltd (CHRYY) is facing competition from satellite broadband providers like Starlink, particularly in rural areas, which could pressure fiber uptake in those segments.
- The company's FY27 CapEx guidance of NZD375 million to NZD415 million is higher than FY26 actuals, reflecting timing of projects and investments in new growth initiatives, which could pressure free cash flow.
Thank you for standing by, and welcome to the Chorus FY26 results. (Operator Instructions)
I'd now like to hand the conference over to Mr. Mark Aue, CEO. Please go ahead.
Good morning, and welcome to the Chorus results presentation for the 12 months ending June 30, 2026. I'm Mark Aue, Chief Executive, and joining me is Drew Davies, our Chief Operating Officer. I'll begin today with an overview of our results for the FY26 year and cover the progress we're making on our strategy. Drew will cover the financials and FY27 guidance before I close out with our outlook and the role we see Chorus playing as core infrastructure for New Zealand's rapidly evolving AI future. We characterize FY26 as strong financial and operational performance, reflecting the resilience of our business model, disciplined execution, and focus on driving simplicity and efficiency as we transition to an all-fiber business. Fiber connections increased by 3% at over 1.1 million connections. Uptake continued to strengthen, reaching 75.9%
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