Chorus Limited (ASX:CNU) Announces Final Price-Quality Decision
Price-Quality Path Decision
The Commerce Commission has released the final price-quality path (PQP2) decision for Chorus Limited (ASX:CNU) for the next regulatory period from 2025 to 2028. Annual revenues are set between $957 million and $1,080 million, including costs and wash-ups.
Key Decision Highlights
Significant elements of the decision include a tilted annuity depreciation method for core fibre assets, deferring $256 million of depreciation and around $327 million in revenue from PQP2. Additionally, a wash-up balance of $195 million from PQP1 will be drawn down during this period. The Commission has also updated the settings for a CPI wash-up to apply in the first year of PQP2, smoothing the revenue profile over the regulatory timeframe. A vanilla WACC of 7.68% will also be applied.
Executive Comments
Julian Kersey, Chorus Chief Corporate and Regulatory Officer, expressed appreciation for the decision, stating, “This decision marks the end of a multi-year process involving substantial effort from both Chorus and the Commission. Chorus thanks the Commission for its engagement and welcomes the certainty that the final decision provides in terms of expenditure allowances and allowable revenues for the next four years.” Chorus will now conduct a review to ensure the new settings are effective.
Next Steps
Chorus will assess the decision to ensure all proposed settings are workable and beneficial for its operations moving forward.
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
This article was generated using GPT-4o mini, a Large Language Model (LLM), to generate summaries of investing news. While AI is generating the content, we know better than to blindly trust our future robot overlords, and every article is edited and fact-checked by an editor holding the appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content of everything published by The Capital Club.