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TPG Profit Dives 11.3%, Corporate Up, Consumer Down

TPG has posted an 11.3% drop in half-year profit to $198.7 million, primarily driven by growth from its corporate sector, and sales from its own fibre wholesale network. Following its HY results, TPG upgraded its full-year guidance.

The telco now expects full year underlying EBITDA to notch between $825 million – $830 million, up from its original forecast of $800 million – $815 million.

For the half-year, revenue remained relatively flat (climbing 0.8%) to $1.25 billion. Compared to the previous corresponding year, EBITDA slipped 11.7% to $418.2 million.

TPG’s consumer segment posted a $11.8 million drop in gross profit, with a marginal decrease in EBITDA. The results were offset by employment and overhead cost savings of around $11.2 million.

The telco’s underlying EBITDA notably lost $21 million as it migrated DSL customers to lower-margin NBN offerings.

Earnings were also hit by a $9 million charge attributed to iiNet’s fixed voice GP reductions, coupled with a $3 million cost associated with increased electricity prices.

By contrast, TPG’s corporate sector increased its EBITDA by $1.7 million during the half-year to $158.9 million.

With its fibre-to-the-base service being moved from its corporate segment to its consumer arm in 2017-18, comparable figures reflect a $5.2 million lift in corporate EBITDA.

TPG is set to spend $1.86 billion [including purchase price for spectrum] for the rollout of its Australian mobile network, and affirms the project in on track, and “in line with original forecasts”.

The telco’s Australian mobile network claims to cover 80% of the population.

The company is also progressing its mobile network rollout in Singapore, with buildout expected to be between $200 million – $300 million.


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