TPG Telecom’s after-tax profit doubles as services revenue tips the balance by $2 billion

Inaki Berroeta (TPG Telecom)

Credit: TPG

TPG Telecom reported strong results for its first half of FY22, with after-tax net profit up 114% year-on-year to $167 million, and services revenue reaching $2.2 billion , up 0.7%.

The substantial growth in after-tax profit for the six months to June 30, the telecom operator said, was due to the recognition of a $110 million capital loss to be used against the sale of its passive tower assets, which was finalized on July 29, 2022.

The sale of these assets generated net cash proceeds of approximately $890 million, which was used to repay debt.

At the same time, the increase in services revenue was due to growth in the second quarter which offset the effects of COVID-19 related restrictions on the telecommunications sector during the first quarter.

Its mobile subscribers and fixed wireless customers also increased, 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 base in the second half,” said CEO and Director. General Inaki Berroeta.

Earnings before interest, taxes, depreciation and amortization (EBITDA), however, did not perform as well, as it fell 5.3% during the period to $837 million, of which $35 million in restructuring costs, which will see it split its wholesale and retail businesses. subsidiaries.

Even excluding these costs, EBITDA still fell 1.4% to $872 million due to higher National Broadband Network (NBN) wholesale rates and higher phone costs. mobiles.

“As NBN pricing continues to challenge industry profitability, we hope the recent reset will lead to practical changes to the Special Access Commitment aligned with NBN’s original purpose of providing fast, reliable and affordable,” said Berroeta.

Regarding the second half of its fiscal year, the CEO said the telecommunications company is “moving into a new phase of growth”, which follows periods of uncertainty in the market and expects the Gain momentum is accelerating over the next six months.

The telecom operator also said it was on track to achieve total merger synergies of $125 million to $150 million by the end of the year, a year ahead of schedule.

“We continue to simplify our business operating model so we can deliver greater value and improve the experience for new and existing customers,” added Berroeta.

“With ongoing regulatory progress for our historic Network Sharing Agreement, we are excited to offer real choice and real competition to the millions of Australians who live, work and travel across regional Australia.”

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Sallie R. Loera