Spark Finance Limited Analysis

Overview

On 8 August 2014, TCNZ Finance Limited changed its name to Spark Finance Limited (Spark Finance).

Spark Finance Limited is a wholly owned subsidiary of Spark New Zealand Limited (formerly Telecom Corporation of New Zealand Ltd) and is the principle finance company for the Spark New Zealand Group.

Spark Finance raises debt funding in New Zealand and internationally. The majority of these funds are then advanced to other members of the Spark New Zealand group in order to assist in funding their operations. Spark Finance enters into derivative financial instruments in order to manage the foreign exchange and interest rate risk associated with its borrowings, as well as to manage the foreign exchange risk associated with the operations of the Spark New Zealand Group.

Spark Finance solely lends to other companies within the Spark New Zealand Group and accordingly, its financial performance should be considered in conjunction with the financial performance of the Spark New Zealand Group.

Performance

The following information was extracted from Spark Finance Limited's FY24 Full Year results, released on 25 February 2025:

Spark Finance recorded net earnings after tax for the six months ended 31 December 2024 of $95 million (31 December 2023: $86 million).

The net assets of Spark Finance as at 31 December 2024 were $968 million compared to $1,072 million as at 30 June 2024. The share capital of Spark Finance as at 31 December 2024 is $883 million (30 June 2024: $883 million) consisting of 882,872,600 issued and fully paid shares, of which 342,872,600 are ordinary shares. Spark Finance did not acquire any of its own shares during the six months ended 31 December 2024 (31 December 2023: nil).

On 30 August 2024, Spark Finance paid a dividend of 18.69 cents per share or $165 million to Spark New Zealand Limited, which was paid through the intercompany current account (31 December 2023: 20.95 cents per share or $185 million).

On 28 November 2024, Spark Finance extended the term of its $100 million committed revolving sustainability linked loan (SLL) facility with Commonwealth Bank of Australia by three years, to mature on 30 November 2027. Spark Finance’s SLL has a dual focus on Spark New Zealand Group’s environmental and gender diversity performance. For the SLL extension, the gender representation target has been replaced with a median gender pay gap target. The environmental targets remain unchanged.

On 28 November 2024, Spark Finance established a NZ$100 million committed revolving facility with Commonwealth Bank of Australia, to mature on 28 May 2025.

The Directors of Spark Finance consider the results of the Company to be satisfactory and the Company to be in a sound financial position.

Spark Finance solely lends to other companies within the Spark New Zealand Group and, accordingly, its financial performance should be considered in conjunction with the financial performance of the Spark New Zealand Group. A copy of the Spark New Zealand Group’s results for the six months ended 31 December 2024 can be found at investors.sparknz.co.nz.

Based on current expectations, Spark Finance will continue to operate as the principal finance company for the Spark New Zealand Group. Spark Finance does not engage in research and development activities.