TPG Profit Down 56% After Axed 4G Plan
TPG Telecom’s decision to cease building Australia’s fourth 4G network has cost the company dearly, with profit more than halving.
Profit for the 2019 financial year after tax was down 56 per cent to $175 million, compared to $397.5 million the year before.
Commenting on the results, TPG executive chairman David Teoh said the reported results are “heavily impacted by the Group’s decision to cease the rollout of its Australian mobile network” at the start of this year.
TPG profits were hit with an impairment expense of $236.8 million as well as a “significant increase in amortisation and interest expenses” relating to spectrum licenses.
The company abandoned its plans to build the nation’s fourth 4G network after a government ban on Huawei equipment threatened its economic viability.
TPG had also been seeking a merger with Vodafone, but was blocked by the Australian Competition and Consumer Commission.
The planned merger also took a $9 million chunk from FY19 EBITDA.
Earnings before interest, tax, impairment, depreciation and amortisation was reported down 2.1 per cent to $809.4 million.
Revenue was also slightly down for FY19 to $2.477 billion, a fall of less than one per cent.
The company will pay a 2 cent dividend on November 19.