New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Chorus 1H21 – First Impressions</h2>
There is nothing significant in Chorus’s (CNU) 1H21 result. Revenue, EBITDA, and dividends were all in line with our forecast. NPAT was higher on lower interest costs.
CNU is “tracking towards the lower half” of EBITDA guidance of $640-660m, consistent with our NZ$647m forecast. Capex guidance has increased NZ$30m to NZ$670-700m, due to (1) demand for greenfield fibre “ahead of expectations”, and (2) greater mass market fibre connections (in part offset by lower backbone builds).
At this time the key driver for CNU is the fibre regulatory process rather than its operating performance. The next steps in the process are draft Commerce Commission decisions on CNU’s regulatory asset base (RAB), regulatory WACC, and maximum allowable revenue (MAR) scheduled for late 2Q.
Investor briefing
Conference call: 10:00am (NZ time), NZ 0800 452 257, AU 1800 093 431, HK +852 3005 2399, Singapore 800 120 6856, US 1877 788 9032, int’l +61 2 8047 9393. Passcode: 89247326#.
Webcast:&nbsp;<a href="http://www.chorus.co.nz/webcast" target="_blank" data-saferedirecturl="https://www.google.com/url?q=http://www.chorus.co.nz/webcast&amp;source=gmail&amp;ust=1614037292230000&amp;usg=AFQjCNGRYYFeuVthHgPFOHLUZkQC0OSQcQ" rel="noopener">www.chorus.co.nz/webcast</a>
1H21 result summary
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.2&amp;permmsgid=msg-f:1692338001602868297&amp;th=177c6472316ef449&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ-GOv-gXQef-w5c5awVMBsyj3vS4voY1kao9Bo2EBEnxe8JiAhj8fkghbULpkhaezCaDdUptMI4fZMLnmkN7yndyf28I_F2pg8mVJtfaPMBxg109ssBlmppQXg&amp;disp=emb" width="441" height="122" class="editor-image img-responsive" data-image-whitelisted=""></figure>
Source: Company reports, Forsyth Barr analysis
Matt Henry &nbsp;CFA Head of Wealth Management Research
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.3&amp;permmsgid=msg-f:1692338001602868297&amp;th=177c6472316ef449&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ9fPUHtgDd-ipkV94KSkpuB7oHvX5yRa-VomWyEt4lCFTV9hnovEo5izpMWSaitee0U5CFQxm8AEIATO0h2A6tUdyvcPabNUKNgPod-22Tav3jOpfEoF5P-HSU&amp;disp=emb" class="editor-image img-responsive"></figure>
 M: +64 21 329 291 |P: +64 9 368 0115 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Chorus 1H21 – First Impressions
There is nothing significant in Chorus’s (CNU) 1H21 result. Revenue, EBITDA, and dividends were all in line with our forecast. NPAT was higher on lower interest costs.
CNU is “tracking towards the lower half” of EBITDA guidance of $640-660m, consistent with our NZ$647m forecast. Capex guidance has increased NZ$30m to NZ$670-700m, due to (1) demand for greenfield fibre “ahead of expectations”, and (2) greater mass market fibre connections (in part offset by lower backbone builds).
At this time the key driver for CNU is the fibre regulatory process rather than its operating performance. The next steps in the process are draft Commerce Commission decisions on CNU’s regulatory asset base (RAB), regulatory WACC, and maximum allowable revenue (MAR) scheduled for late 2Q.
Investor briefing
Conference call: 10:00am (NZ time), NZ 0800 452 257, AU 1800 093 431, HK +852 3005 2399, Singapore 800 120 6856, US 1877 788 9032, int’l +61 2 8047 9393. Passcode: 89247326#.
Webcast:&nbsp;www.chorus.co.nz/webcast
1H21 result summary

Source: Company reports, Forsyth Barr analysis
Matt Henry &nbsp;CFA Head of Wealth Management Research

 M: +64 21 329 291 |P: +64 9 368 0115 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Chorus Ltd

Chorus: 1H21 – First Impressions