Spark Slashes 2025 Forecast: Earnings and Dividend Cuts Hit Telecom Giant

New Zealand-based telecommunications company Spark has announced it is considering selling its stake in Connexa, a mobile tower business, as part of a review of its non-core assets. This decision comes amid reports that the Ontario Teachers’ Pension Plan (OTPP) is also exploring the sale of its share in Connexa. Earlier this month, the Australian Financial Review revealed that the pension fund, which owns an 83 percent stake in Connexa—responsible for approximately 2,400 cell towers, or two-thirds of New Zealand’s infrastructure for telecom providers like Chorus, One NZ, and 2 Degrees—was weighing the option to sell part of its holdings.

Connexa was established after Spark sold a 70 percent interest in its passive mobile infrastructure to the Ontario Teachers’ Pension Plan in July 2022, with the deal finalized in October 2022. Spark NZ stated, “We are reviewing all non-core assets to determine whether Spark is still the best owner, or if divestment or partnerships could provide greater value to shareholders while further improving the balance sheet.” The company indicated that it has received strong interest in Connexa and plans to give an update on its review of non-core assets during its interim results in February, or sooner if any significant developments arise.

Spark has revised its earnings and dividend forecasts for the 2025 fiscal year, citing that its financial performance is “below acceptable standards.” The company now anticipates its operating earnings (EBITDA) will range between $1.12 billion and $1.18 billion in 2025, representing a 4% decline from the earlier projection of $1.165 billion to $1.22 billion. Additionally, Spark has lowered its dividend forecast from 27.5 cents to 25 cents, with 75% being imputed. Jeremy Hutton from Milford Asset Management analyzes the reasons behind this downturn.