Spark New Zealand Ltd

SPK: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$2.20	Rtcxsfy	Vtmvygrfv

Spark New Zealand Earnings: Dimmed by IT

Brian Han

Aug 23, 2024

We cut our fair value estimate for Spark by 6% to NZD 4.60 per share, or AUD 4.20 at current exchange rates. The culprits behind the 3% fall in fiscal 2024 underlying EBITDAI to NZD 1.163 billion and the abrupt 7% decline in the second half are not just cyclical. Management attributed much of the "disappointing outcome" to challenging economic conditions, especially on enterprise and government spending. However, the outsize earnings impact exposed structural cost issues in the group's IT units that we previously overlooked.

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