Chorus expects floods to cost it less than $20m, before insurance

Monday, 20 February 2023

Chorus is short of 220 technicians but expects the shortfall to drop to 70 by May, now the Government has eased immigration settings.

People may need to wait longer to get ultrafast broadband installed while Chorus focusses on fixing faults caused by the recent cyclones.

Releasing the company’s interim financial results on Monday, chief executive Jean-Baptiste Rousselot said it had managed to restore some fibre broadband connectivity to Gisborne over the weekend.

That had involved using helicopters to lay 5 kilometres of new fibre cabling “over multiple cuts in very difficult environments”, he said.

“We're seeing services going live again, which is encouraging, but there is still a lot of work to do.”

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Chorus was concentrating on restoring connections to cellsites, over fixing broadband faults, to assist emergency services and make it easier for people to reach friends and family, he said.

“The widespread community devastation” caused by the recent cyclones meant Chorus was having to reprioritise some work to focus on restoration efforts, he said.

Chief financial officer Andrew Carroll said he expected the cost of the floods to Chorus, including lost revenues, would total less than the $20 million cost it bore from the Canterbury earthquakes, of which $11m had been covered by insurance.

Rousselot said he expected there would be “a concerted review” across all infrastructure providers of how to increase resilience.

The company reported a net profit of $9m for the six months to the end of December, down from a profit of $42m in the same period in 2021.

But its operating profit rose by $10m to $342m from its “underlying” operating profit in the same period last year and it held its dividend at 17 cents per share.

It also increased its forecast operating profit for the full year to between $675m and $690m, while cautioning that did not include “any potential flood and cyclone-related impacts”.

Chorus’ net profit was reduced by increasing interest rates, one-off costs associated with refinancing debt and the accelerated depreciation of its copper network.

But Rousselot said Chorus’ performance had also been impacted by a shortage of 380 telecommunications technicians that had reduced the number of fibre installs it could complete.

It had since reduced the shortfall to 220 thanks to the Government’s decision in December to add telecommunications technicians to the immigration “green list” and it was on track to cut it further to 70 by May, he said.

Chorus completed the communal roll-out of ultrafast broadband in December, with 87% of the population now within reach of fibre from it and other fibre companies.

But Rousselot said it had a plan to increase coverage to 90% “with the right regulatory and policy settings”.

Chorus shares were trading up 6½ cents and $8.43½ in late morning trading on the NZX.