TPG Full-Year Profit Dives 4.6% To $396M
TPG Telecom has post 4.6% slump in full-year net profit [after tax] to $396.9 million, driven by heightened NBN margin pressures, ahead of its merger with Vodafone Hutchinson Australia.
For the twelve months to July 31st, EBITDA dropped $49.7 million YoY to $841 million – a figure the company claims does not accurately portray business health.
The telco advises 2017 full-year earnings were bumped by a one-off payment of $55.8 million.
Consequently, TPG claims underlying EBITDA for full-year 2018 has climbed $6.1 million – notching its 10th consecutive year of underlying EBITDA growth.
For the twelve months, underlying profit climbed 3.7%, from $417.3 million to $432.6 million.
By contrast, total revenue remained flat at $2.49 billion.
TPG claims lower full-year net profit remains within company expectations, with results slightly offset by its strong corporate division (an NBN competitor). Cost savings from iiNet also bumped results.
Chief Operating Officer, Stephen Banfield, claims a slowdown in NBN migration has enabled TPG to manage margin pressures:
“… the pace of the migration to the NBN being slower than anticipated, the margin erosion that we have been experiencing on a per subscriber basis is also a little less than what we had factored into the guidance.”
For the full-year, TPG’s consumer segment EBITDA dived $10 million, driven by NBN margin pressures.
Results were offset by $17 million EBITDA growth within TPG’s corporate division.
The news follows confirmation of TPG and Vodafone Hutchinson Australia’s $15 billion merger, further intensifying competition against Optus and Telstra.
The deal is pending regulatory approval, and will see both companies leverage each other’s broadband and mobile strengths.
Both TPG and Vodafone have submitted a joint bid for 5G spectrum, which will continue to exist should the proposed merger be denied.
Irrespective of the tie-up, TPG claims it’s still pursuing mobile network roll-out, with trial services to hit market next year. The telco has reportedly allocated $600 million to its mobile network roll-out, which will complement Vodafone’s existing infrastructure.