Chorus' fibre broadband has continued to generate strong demand, fostering underlying revenue growth totalling $959 million, up by $4 million year-over-year from 2021.
The company's focus for the financial year 2022 was to continue offering customers the benefits of fibre broadband while striving to meet its goal of one million fibre connections by December.
Chorus notes that there were some challenges involved in this, such as lockdowns as part of the country's pandemic response, as well as the ongoing effects of unwell workers and reduced consumer activity.
However, the company has still managed to deliver strong results due to measures such as carefully managing expenditure, which helped to mitigate inflation and COVID-19 pressures.
This resulted in Chorus achieving underlying operating expenses of $299 million, an increase of $1 million from the financial year 2021.
Further, this produced an underlying EBITDA of $660 million in the financial year 2022, growing $3 million from restated 2021 EBITDA of $657 million.
The company's EBITDA for 2022 grew to $657 million when factoring in its network optimisations program, a legal settlement, and the release of a $9 million holiday pay provision.
Net profit after tax was $64 million compared to a restated total of $51 million in the financial year 2021.
For the first time in 10 years, this strong result has allowed Chorus to return to earning more than it is investing in the network, facilitating a dividend of 35 cents for the financial year 2022 and increased dividend guidance for the financial years 2023 and 2024.
"FY22 was a crossroads year for Chorus with the core elements of our utility-style regulatory framework now settled and the finish line in sight for our 11-year fibre rollout," Chorus CEO JB Rousselot says.
December 2021 also saw Chorus' Big Fibre Boost drive a significant change in the speed profile of consumer and business fibre plans, pivoting the country's data growth in a new direction to reach the top tier of global broadband rankings.
Chorus notes that nearly 70% of residential fibre users went from 100 megabits-per-second (Mbps) to 300 Mbps.
An additional 23% of consumers are on 1 gigabit per second (Gbps) plans.
"In the latest global fixed broadband rankings from Ookla, New Zealand has moved up two places to 10th; we were 29th in July 2021. This shift puts us just behind Japan," Rousselot notes.
Chorus' transition from network builder to a more operational future is well underway, and its refreshed strategic focus is "to connect Aotearoa so that we can all live, learn, work and play".
"Our fibre rollout is now 98% complete, and we have just 17,000 premises left to pass by Christmas. We added 88,000 new fibre connections to the network, and overall uptake increased from 65% to 69%," Rousselot adds.
"We were pleased to see strong growth in our major centres of Auckland and Wellington, where uptake increased to 79% and 68%, respectively.
"During the pandemic, our digital inclusion initiatives focused on student broadband connections, helping seniors with their connected lives, and supporting the charitable sector to embrace digital tools."
Chorus also saw a 23% increase in data traffic on its network throughout the year, equivalent o 1.3 billion gigabytes of data.
Moreover, the monthly average household data usage for a fibre user increased from 500 gigabytes (GB) to 567 GB.
"Remarkably, about 15 per cent of fibre consumers are already using more than 1,000 GB of data a month, and we're forecasting that to be the average residential household usage by 2025," Rousselot says.
"It's clear that we're now far more reliant on our internet connections. The experience of the last couple of years has taught us that reliable internet access, at gigabit speed, is no longer a luxury.
"Gigabit connections now represent 23% of our residential fibre connections and nearly a third of all new connections. Our multi-gigabit hyperfibre services are now gaining traction with more than 1,000 primarily residential connections, and we expect hyperfibre's uptake to mirror that of our gigabit service."
In May, Chorus trialled a 25 Gbps service substantiating fibre as the most cost-effective and scalable broadband technology.
"We demonstrated a 25 Gbps service that seamlessly integrates with existing gigabit and Hyperfibre services on the same fibre strand. This will allow service providers to upgrade their customers on demand in the future," Rousselot adds.
The increasing uptake of fibre in urban areas means Chorus is shifting from trialling copper withdrawal to a more production-like process.
Out of the approximately 2,500 copper broadband cabinets in its fibre areas, a quarter have been notified for withdrawal.
"Across the country, there are now 130 street cabinets empty of copper connections. We're pleased that about 90% of broadband consumers moving off copper have chosen fibre as their preferred broadband technology," Rousselot says.
"The shift to more efficient fibre broadband will be a significant contributor to our efforts to reduce our carbon footprint.
"Our 2022 Sustainability Report includes a new commitment to a Science Based Target of a 62% reduction in our Scope 1 and 2 emissions by 2030, based on 2020 levels."
Chorus will pay a final dividend of 21 cents per share, unimputed, on October 11 2022, bringing total dividends for FY22 to 35 cents per share.
Guidance for the financial year 2023 is subject to no material changes in regulatory or competitive outlook.
Capital expenditure for the financial year is anticipated to be between $410 and $450 million, with the dividend increasing to 42.5 cents per share, unimputed in 2023 and Chorus expecting a minimum dividend of 47.5 cents per share unimputed in 2024.
Previously reported results for the financial year 2021 have been restated due to an ongoing change in the accounting treatment of field services revenue for roadworks.
