Iñaki Berroeta (TPG Telecom)
TPG Telecom has posted strong results for its first half-year for FY22, with net profit after tax rising 114 per cent year-on-year, to $167 million, and service revenue reaching $2.2 billion, up 0.7 per cent
The substantial growth in post-tax profit for the six months to 30 June, according to the telco, is due to the recognition of a a $110 million capital loss benefit to be utilised against the sale of its passive tower assets, which was completed on 29 July 2022.
The sale of those assets resulted in roughly net cash proceeds of $890 million, which went towards paying down debt.
Meanwhile, the uptick in service revenue is due to second quarter growth offsetting the effects of COVID-19-related restrictions on the telecommunications sector during the first quarter.
Its mobile subscriber and fixed wireless customers also rose, increasing by 135,000 and 33,000, respectively.
“Our strong competitive offering has driven growth in our mobile and fixed wireless subscriber base, positioning us to deliver improved performance as we complete our transition to a growth footing into the second half,” said CEO and managing director Iñaki Berroeta.
Earnings before interest, tax, depreciation and amortisation (EBITDA) were not as successful however, as they fell by 5.3 per cent over the period, to $837 million, which included $35 million of restructuring costs, which will see it split its wholesale and retail subsidiaries.
Even excluding these costs, EBITDA still fell 1.4 per cent, to $872 million, as a result of higher National Broadband Network (NBN) wholesale charges and rising costs for mobile phones.
“While NBN pricing continues to challenge industry profitability, we are hopeful the recent reset will lead to practical changes to the Special Access Undertaking aligned to NBN’s original purpose to provide fast, reliable and affordable connectivity,” Berroeta said.
Looking towards its second half of its financial year, the CEO claimed the telco “is transitioning to a new phase of growth”, which follows periods of market uncertainty and expects earning momentum to accelerate in the upcoming six months.
The telco also said it is on track to deliver total merger synergies of $125 million to $150 million by the end of the year, coming in a year earlier than expected.
“We continue to simplify our business operating model so we can offer greater value and enhance the experience for new and existing customers,” Berroeta added.
“With the regulatory progress underway for our landmark network sharing agreement, we are excited to bring real choice and competition to the millions of Australians living, working and travelling through regional Australia.”
