TPG Telecom reports $734m profit in first post-merger full year result

TPG Telecom has posted strong full year FY2021 financials for its first post-merger result, thanks to an increase in market share for fixed-line NBN and strong enterprise sales.

In the 12 months ended 31 December 2020, TPG reported net profit after tax of $734 million, revenue of $4.35 billion and EBITDA of $1.39 billion.

All metrics represented sizable increases from the previous year as the FY2019 full year results only accounted for Vodafone’s full year financials and just six months of TPG’s financials at the time.

Contributing to the revenue included a 6 percent increase in its fixed broadband customer base with 117,000 new subscribers during the period, as well as selling the most NBN Enterprise Ethernet in Australia.

Chief executive Iñaki Berroeta told investors the 2020 results demonstrate that TPG has delivered for customers and shareholders during a “challenging” year, while commencing its COVID recovery.

“In 2020, we completed the merger and delivered on our promises to customers and shareholders in the most trying year for Australia’s economy and society in decades, while managing a number of significant regulatory challenges,” Berroeta said.

“We drove increased competition in the market, supported our customers and employees through COVID, accelerated our 5G rollout, made solid progress on integration activities, reduced debt, and declared a maiden dividend of 7.5 cents per share.

“Our results are pleasing given we were not only managing COVID impacts, NBN headwinds and aggressive market competition, we were also regaining ground following uncertainty around the merger delay and the 5G vendor restrictions.”

Looking ahead, TPG will continue with merger integrations and ramp up its 5G network rollout.

The telco has started testing its 5G fixed wireless offering on its 3.6 GHz spectrum in Australia’s six largest cities, and expects to start offering services to customers in H1 2021.

“As we move into 2021, we are building on momentum gained in the final quarter of 2020, continuing our merger integration plans, our 5G mobile network is on track to reach scale in the top six cities by the end of the year,” Berroeta said.

TPG also said it entered 2021 with increased confidence despite continued uncertainty due to COVID, ongoing NBN headwinds and the introduction of the Regional Broadband Scheme (RBS) levy.

“While we are in a stronger position to respond to aggressive competition in the market and mitigate headwinds, we will continue to be impacted by global travel restrictions, NBN margin erosion and the new RBS levy,” Berroeta said.

“To offset these headwinds, we will work to service more customers with fixed wireless and other onnet services, continue to improve performance in mobile, grow Enterprise and Government, and realise significant merger synergy cost savings.”