Home Telecoms & NBN TPG sees full-year profit fall as NBN continues to bite
TPG sees full-year profit fall as NBN continues to bite Featured

TPG Telecom has reported a net profit after tax of $396.9 million for the year ending 31 July, a drop of 4.6% compared to the previous year, with EBITDA of $841.1 million, down 5.6%. The results reflect the continuing pressure on margins caused by the NBN.

The company said the difference of $49.7 million in its EBITDA from 2017 could not be taken as providing a correct picture of its financial status.

It said the FY18 EBITDA result did not include an material irregular items and was representative of the underlying EBITDA for the period.

tpg reconciliation

"By contrast, as reported last year, the FY17 EBITDA result benefitted from $55.8 million of favourable non-recurring items (predominantly a profit realised on sale of an investment)," TPG said.

Hence, even though there was a $49.7 million decrease in EBITDA from 2017 to 2018, the underlying EBITDA increased by $6.1 million, from $835 million to $841.1 million, giving the company a 10th successive year of underlying EBITDA growth.

Last month, TPG announced a merger with Vodafone Hutchison Australia which would create a company with an enterprise value of about $15 billion.

tpg revenue

It said 50.1% of the merged entity would be owned by Vodafone with the remainder to be owned by TPG.

TPG said it had net debt of $1.27 billion at the end of the 2018 year, a leverage ratio of about 1.5 times EBITDA. It also had undrawn headroom of more than $1 billion in its debt facilities to find the balance of its planned mobile network in Australia and Singapore.

The company said the NBN would continue to affect earnings in the year ahead, as both DSL services and home phone services continued to migrate to the broadband network. It said there would be also be an impact by adoption of the new AASB15 rec=venue accounting standard.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the sitecame into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

 

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