iiNet bolsters TPG results as net profit increases by 11% in 1H17

21 Mar 2017

Australia’s TPG Telecom has published its financial results for the first half of its current fiscal year (ending 31 July 2017), revealing an 11% year-on-year increase in net profit, as it continued to benefit from its acquisition of local ISP iiNet.

TPG generated underlying revenues of AUD1.235 billion (USD954 million) in the six months ended 31 January 2017, representing y-o-y growth of 7%, of which the largest proportion – AUD712.0 million, up from AUD661.8 million – was attributable to the ‘TPG Consumer’ division. iiNet, meanwhile, was responsible for revenues totalling AUD541.3 million in 1H17, up from AUD496.9 million a year earlier, with ‘TPG/AAPT Corporate’ recording turnover of AUD337.5 million, up from AUD325.2 million.

EBITDA totalled AUD473.4 million in 1H17, representing an increase of 8% against the corresponding period a year earlier, with the company’s consumer division recording EBITDA of AUD141.2 million, compared to AUD125.6 million in 1H16; growth was said to have been driven by an increase in the number of subscribers signed up to fibre-to-the-building (FTTB) and National Broadband Network (NBN) services. For its part, TPG’s corporate division saw EBITDA of AUD141.1 million, up 7% y-o-y on the back of ‘strong data and internet sales and margin expansion’, while iiNet contributed EBITDA of AUD141.7 million, with that unit’s organic EBITDA growth driven by broadband uptake and the ‘ongoing financial benefits from integration activities’. Meanwhile, net profit after tax (NPAT) attributable to shareholders totalled AUD224.0 million in the period under review, up from AUD202.5 million, with underlying NPAT rising by AUD45.2 million to AUD207.5 million. According to TPG, the increase in underlying NPAT was primarily due to EBITDA growth and a AUD17.0 million pre-tax decrease in net financing costs.

In operational terms, at the end of January 2017 TPG had 1.911 million broadband accesses on its books, compared to 1.842 million a year earlier, with iiNet accounting for more than half of those (990,000, up marginally from 989,000). ‘TPG Consumer’ broadband subscriptions numbered 921,000 meanwhile, with a notable increase in NBN-based subscribers, which more than doubled to 173,000, from 78,000 at end-January 2016. Reporting FTTB accesses for the first time, TPG revealed that 24,000 customers have now taken up a service using this technology. In the mobile arena, TPG ended the reporting period with 453,000 subscribers (165,000 on an iiNet-branded service, and 288,000 on a TPG-branded service), down from 473,000 a year earlier (176,000, iiNet / 297,000, TPG).