TPG Telecom’s first-half profit has slumped 76.5 per cent to $46.9 million after its decision to halt the rollout of its planned mobile network resulted in a $227.4 million impairment.
Underlying earnings ticked up despite a 1.5 per cent fall in revenue, but the writedown of the value of its spectrum and mobile assets pushed profit for the six months to January 31 down from $199.8 million in the prior corresponding period.
TPG also recorded $4.4 million in costs relating to its planned merger with Vodafone Australia, a tie up that analysts suggest prompted TPG to scrap its mobile network on competition concerns.
Stripping out those one-off hits, underlying earnings before interest, tax, depreciation and amortisation rose 2.8 per cent to $424.4 million, and underlying net profit increased by 3.5 per cent to $225.2 million.
Underlying EBITDA was again hit by the migration of customers to low-margin NBN services, but TPG said it was successful in offsetting the headwinds thanks to its corporate division and internal efficiencies.
TPG held its interim dividend at a fully franked 2.0 cents, and reaffirmed full-year EBITDA guidance of $800 million to $820 million, excluding merger costs or expenses related to its Australia or Singapore mobile operations.
TPG said its new Singapore network now covers 99 per cent of the island nation and it has expanded the free trial period to 200,000 users following positive customer feedback.
TPG’S FIRST HALF FIGURES
* Net profit down 76.5pct to $46.9m
* Revenue down 1.5pct to $1.236b
* Fully franked interim dividend flat at 2.0 cents