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 FY25 Full Year results, released on 27 August 2025:

Spark Finance recorded net earnings after tax for the year ended 30 June 2025 of $193 million compared to $168 million for the year ended 30 June 2024. Potential volatility in earnings caused by Spark Finance's exposure to movements in foreign exchange rates on financial instruments that are held on behalf of members of the Spark New Zealand Group is mitigated by back-to-back deals with these members. The net foreign exchange loss for the year ended 30 June 2025 was nil (30 June 2024: nil).

The net assets of Spark Finance as at 30 June 2025 were $1,068 million compared to $1,072 million as at 30 June 2024. The share capital of Spark Finance as at 30 June 2025 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 year ended 30 June 2025 (30 June 2024: 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 (30 June 2024: 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 the 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 $100 million committed revolving facility with Commonwealth Bank of Australia, which matured on 28 May 2025 and was not renewed. On 24 April 2025, Spark Finance extended the term of its $200 million committed standby revolving credit facility by one year, to mature on 30 April 2028.