TPG reports steady revenue for first half

As for profitability, that is a rorschach test of statutory versus underlying.
Written by Chris Duckett, Contributor

TPG reported a steady half to January 31 with AU$1.25 billion in revenue reported, up 1% year on year.

Broken down between its divisions, consumer increased revenue by AU$20 million to AU$872 million, while corporate dropped AU$10 million to AU$373 million.

Beyond that, profitability is a case of how one wishes to read it.

In statutory terms, earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased from AU$193 million to AU$407 million, however, in underlying terms, EBITDA shrank by 6% from AU$424 million to AU$399 million.

TPG said the difference between the two sets of figures was due to the AU$230 million accounting hit the company took last year as a result of writing-down its mobile network.

Similarly, net profit grew three-fold from AU$47 million to AU$144 million in statutory terms, or dropped by 30% from AU$225 million to AU$158 million in underlying terms.

By divisions and in underlying terms, EBITDA for the consumer business dropped AU$32 million to AU$211 million while corporate EBITDA increased AU$10.5 million to AU$193 million.

Fresh from its victory over the ACCC to get its merger with Vodafone Australia approved, TPG said the ACCC had agreed to pay its legal costs.

For its part, the ACCC said on Thursday it would not appeal the decision after determining it did not have grounds for appeal, which requires the establishment of an error of law by the judge.

"The ACCC remains disappointed by this outcome, which has closed the door on what we consider was a once in a generation chance for increased competition in the highly concentrated mobile telecommunications market," ACCC chair Rod Sims said.

"The future state of competition without a merger is uncertain. But we know that competition is lost when incumbents acquire innovative competitors".

TPG also provided an update on its Singapore business on Thursday, where the company expects to launch paid services in March. The telco has more than 400,000 users on its free trial service and will offer a SG$10 for 50GB prepaid plan with 1GB of roaming data.

Overall, the company spent AU$546 million in capital expenditure, which included AU$352 million for 700MHz spectrum and AU$69 million for building out the Singapore mobile network.

In Australia, TPG now has 1.94 million broadband customers, made up of 1.4 million on NBN, 123,000 cable and VDSL customers on TPG's own network, 355,000 on-net ADSL customers, 39,000 using off-net ADSL, and 20,000 other off-net customers.

The picture is much less rosy for Australian mobile subscribers, as the company lost 43,000 customers in the half, to now have a total of 367,000 customers.

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