EMPTY CHAIR
Chorus hunts for new CEO
Chorus boss Kate McKenzie doesn’t intend to take another executive role after she steps down at the end of the year. Chorus announced McKenzie’s resignation while reporting a drop in full-year profit to $53 million for the 12-months to June 30, against the previous year’s $85m.
There was no immediate appointment to replace McKenzie. The board says a search is under way.
Former Telstra executive McKenzie was named Chorus’ new boss in December 2016. The company gave no reason for her exit beyond that she wants to “spend more time with her Sydney-based family”.
“I don’t indeed to take another executive role,” she said on a conference call.
McKenzie was one of just three women to be running an NZX top 50 company (the others are a2 Milk Company’s Jayne Hrdlicka and newly installed Spark boss Jolie
Hodson). Her tenure saw solid progress on the public-private ultra-fast broadband (UFB) fibre rollout, which stayed on time and budget, but was marred by a major scandal involving work exploitation by subcontractors.
Her floated proposal for a single company to build a single 5G network — as Chorus has done for most of the UFB — ended up going nowhere.
The company pegged the profit fall on increased interest costs of borrowing to fund the UFB rollout.
Ebitda fell to $636m from the yearago $653m, in line with guidance, with $625-$645m forecast for 2020.
Chorus paid a final dividend of 13.5 cents per share for a full-year 23c, and forecast a 2020 dividend of 24c.
Total fixed-line connections fell from the year-ago 1.53 million to 1.45 million — in line with analysts’ estimates as Spark makes inroads with fixed-wireless, and Chorus loses copper lines upgraded to fibre in areas controlled by smaller wholesalers Enable, Ultrafast Fibre and NorthPower Fibre.
Chorus said its leg of the UFB rollout (due to wrap up in 2022) was now 80 per cent complete with 842,000 premises passed and 584,000 connected.
Demand for data on Chorus’ network also continues to break records, reflecting the ever-increasing range of online streaming content and the proliferation of connected devices in the home, the company said.
Monthly average household data usage on copper and fibre connections across Chorus’ network rose by 55GB to 265GB in FY19. Fibre customers used an average of 357GB.
One gigabit per second fibre plans (the fastest and most expensive) now make up for 10 per cent of Chorus’ installed base.
Chorus also squeezed more productivity from its contractors, with the average lead time for a UFB install falling from 13 to eight days, despite crews falling from 800 to 670.
Small business customers were a weak point. McKenzie told a conference call that about half of residential customers within reach of the UFB had connected, but only one-third of small businesses had hooked up to fibre, where it was on offer.
McKenzie also said a restructure under way would affect about 500 roles, about half of Chorus’ workforce, and yield significant savings.
The shares closed at $4.99 yesterday, down 0.15c or 2.92 per cent. The NZX50 closed down 1.31 per cent overall on trade war jitters.