Shares in Chorus Ltd (ASX: CNU) fell 3% yesterday after the company announced falling profits and the resignation of its CEO.
Chorus is a provider of telecommunications infrastructure throughout New Zealand. The company was demerged from Telecom New Zealand in 2011 and is currently listed in both Australia and New Zealand. Chorus does not sell directly to end consumers but rather provides wholesale services to retailers.
What Did The Company Report?
Chorus reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $636 million on operating revenue of $970 million. Net profit after tax (NPAT) fell 38% on the previous financial year, coming in at $53 million.
The significant fall in profit can be attributed to a marginal decline in revenue and an increase in borrowing costs.
The company announced a final dividend of 13.5 cents per share bringing the full year dividend to just under 23 cents. This places Chorus shares on a trailing yield of 4.8%.
The company has been rolling out its ultra-fast fibre broadband (UFB) network which is now 80% complete, with uptake increasing from 45% to 53% during FY19.
CEO To Depart
It was a busy day for Chorus with the company also announcing that current CEO Kate McKenzie will step down from the top job at the end of the year.
The pending departure of the CEO may have added to the negative sentiment surrounding Chorus shares throughout the day.
The company said the search for a replacement was underway but didn’t provide any clear guidance as to the expected time frame for a new appointment.
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At the time of publishing, Luke has no financial interest in any companies mentioned.
