Chorus profit falls, chief executive stepping down

Chorus reported a drop in full-year profit this morning, as expected - and the surprise departure of its boss, Kate McKenzie.

McKenzie will step down as managing director at the end of the year.

Unlike Spark, where Jolie Hodson was immediately named to succeed Simon Moutter, there was no immediate appointment to replace McKenzie. The board says a search is under way.

Telstra alumnus McKenzie was named Chorus' new boss in December 2016, replacing the long-serving Mark Ratcliffe.

The company gave no reason for her departure beyond that she wants to "spend more time with her Sydney-based family".

McKenzie was one of just three women to be running an NZX50 (the others are A2'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, but was marred by a major scandal involving work exploitation by sub-contractors.

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.

Chorus' net profit for the 12-months to June 30 was $53 million, against the year-ago $85m.

The company pegged the profit fall on, "the increased interest costs of borrowing to fund the UFB rollout".

Ebitda fell to $636m from the year-ago $653m, in line with guidance.

Chorus paid a final dividend of 13.5 cents per share for a full-year 23cps, and forecast a 2020 dividend of 24cps.

Total fixed-line connections fell from the year-ago 1.53m to 1.45m - 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.

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