The Chorus Ltd (ASX: CNU) share price is moving higher, up 2% in morning trade.
Below we take a look at the New Zealand based telecommunications infrastructure company's latest revenue proposal.
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What revenue did Chorus submit?
Chorus' share price is gaining after the company tendered its maximum allowable revenue submission (MAR) to New Zealand's Commerce Commission for the 2022–2024 regulatory period.
The submission is based on the starting Regulated Asset Base of NZ$5.5 billion (AU$5.9 billion) submitted to the Commission in March. Chorus stated this is conservative and doesn't properly reflect the costs of building its ultra-fast broadband (UFB) network.
The submission is forecast to deliver NZ$720–$820 million in revenue during the period. Chorus' CEO JB Rousselot said this was consistent with the company's forecast fibre revenues during the first regulatory period.
Rousselot added:
We want to encourage fibre uptake, investment and innovation, consistent with the goals of our public-private partnership with government and our desire to help more New Zealanders realise the benefits of fibre broadband.
The MAR proposal includes the use of tilted depreciation to ensure a smooth transition into the new regulatory regime and properly reflect the commercial risks we face.
Chorus said it remains in talks with the Commission on various aspects of the new regulatory framework in New Zealand. It is strongly advocating that the Regulated Asset Base "reflect the true costs" of its UFB public-private partnership requirements. Chorus believes this would see Regulated Asset Base outcomes of up to $6 billion.
Chorus share price snapshot
It's been a challenging year for Chorus shareholders, with shares down 15% over the past 12 months. By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 29% at that same time.
Chorus has continued to struggle in 2021, with shares down 20% year-to-date.
At the current share price of $5.82, Chorus pays an annual dividend yield of 4%, unfranked.
