There are strict rules about how listed companies like Chorus can communicate financial information to shareholders. And the people doing the communicating for these companies speak what at times sounds like a private language.
So what does Chorus’s statement from earlier today mean in plain English?
In light of the ongoing regulatory uncertainty facing Chorus, including the outcome of the Government’s independent review, Chorus has elected to withdraw its FY14 dividend guidance of 25.5 cents per share.
We’ve no idea how the government review of the Commerce Commission ruling about copper access prices will turn out, so we’re withdrawing the predictions we previously made about next year’s dividend.
“At this time of unprecedented levels of investment by Chorus, withdrawing dividend guidance is a regrettable but necessary step in light of the ongoing uncertainty Chorus faces” – Mark Ratcliffe, Chorus CEO.
It costs a lot of money to build a fibre network. The money has to come from somewhere. We hope the government somehow tips a little more into the pot or perhaps overturns the Commerce Commission, but whatever happens now, it’s going to cost shareholders something.
Chorus is investing roughly three dollars in the Ultra-fast Broadband initiative for every dollar of financing provided by the Crown to support the delivery of the upgraded infrastructure, which is of critical importance to New Zealand’s future.
Like we already said, we’re spending a lot of your money on this.
“We are proud of our role as the cornerstone partner in the Ultra-fast Broadband initiative, which is being delivered like clockwork.”
Nobody seems to take any notice of what a good job we’ve done so far.
“We remain hopeful that as the major partner in New Zealand’s largest public private partnership we can work with the government to find a timely solution to the current issues that works for all parties and provides Chorus and its investors with the certainty we need to get on with delivering this once in many generations infrastructure upgrade.”
Can we remind everyone once more that this project is expensive? We’re almost certainly going to take some pain over this, let’s hope the taxpayers, service providers or consumers get to share some of the burden.