Abandoned mobile network rollout leads to net profit tumble for TPG in FY19

5 Sep 2019

Australia’s TPG Telecom has published its results for the year ended 31 July 2019, with net profit slumping in the wake of the company’s decision to abandon its mobile network rollout.

For the twelve-month period under review, TPG recorded a net profit of AUD173.8 million (USD118 million), down from AUD396.4 million in its previous fiscal year, with the telco noting that its decision to cease the cellular infrastructure rollout had given rise to ‘an impairment expense of AUD236.8 million and a significant increase in amortisation and interest expense relating to [its] Australian spectrum licences’. Further, TPG said that the full-year results also included an AUD9.0 million one-off transaction cost related to its planned merger with Vodafone Hutchison Australia (VHA).

TPG’s reported revenues in FY19 totalled AUD2.48 billion, down marginally from the AUD2.49 billion recorded a year earlier, with the lion’s share – AUD1.72 billion (FY:18 AUD1.74 billion) – attributable to the telco’s consumer unit. EBITDA, meanwhile, fell 2% year-on-year to AUD809.4 million from AUD826.7 million, while capital expenditure in FY19 totalled AUD717.3 million.

In operational terms, TPG reported a group broadband subscriber base of 1.926 million at 31July 2019, down from 1.931 million a year earlier, with an increasing proportion of users – 1.219 million – now connecting via the National Broadband Network (NBN), up from 861,000 a year earlier. Group MVNO subscriber numbers also declined, falling almost 3% y-o-y to 410,000.

Finally, TPG also offered an update on its planned merger with VHA, confirming that, having lodged a legal challenge in May 2019 to the Australian Competition and Consumer Commission’s (ACCC’s) decision to oppose the tie-up, a Federal Court hearing on the matter is now expected to get underway on 10 September and complete within three weeks.