By David Winning


SYDNEY--Telecoms company Spark New Zealand warned on profits Monday after tough trading conditions intensified, but said it expects to meet a prior forecast for dividend payouts.

Spark NZ said it now expects earnings before interest, tax, depreciation, amortization and net investment income--or Ebitdai--of between 1.17 billion New Zealand dollars (US$703 million) and 1.21 billion in the 12 months through June. That was lower than a guidance range of NZ$1.215 billion-NZ$1.260 billion provided to investors.

Spark NZ again highlighted weaker demand in the enterprise and government market, which impacts its Information Technology revenue.

"Since the half, public and private sector spending cuts have deepened, and Spark has seen significantly reduced demand in IT service management and professional services and delays to planned digital transformation projects," the company said.

Spark NZ added that sales of mobile devices and accessories have been softer than expected as high interest rates and cost-of-living pressures dampened consumer spending.

In response, Spark NZ said it plans to accelerate its SPK-26 Operating Program to bring efficiency benefits online faster.

Spark NZ maintained a forecast for an annual dividend of 27.5 New Zealand cents per share, which would represent an increase on a payout of 27.0 cents in FY 2023.


Write to David Winning at david.winning@wsj.com


(END) Dow Jones Newswires

05-05-24 1711ET