TPG Telecom reports steady half-year revenues amid restructuring, NBN costs

TPG Telecom has reported steady revenues following the easing of international travel and other COVID-19 restrictions, which resulted in an increase in mobile and fixed wireless subscriber numbers.

In its half year ended 30 June 2022, the telco posted revenue of $2.2 billion, up 0.7 percent year-over-year. Net profit after tax was $167 million, up from $78 million last year, which included a $110 million capital loss benefit related to the company’s recent tower asset sale.

TPG’s enterprise, government and wholesale segment (formerly the corporate segment) reported revenue of $484 million during the period, down from $487 last year. Costs related to telco services provision, hardware and others declined, with gross margin in the segment increasing from $351 million to $356 million.

The decline was attributed to legacy products, which was offset by an increase in revenue from its enterprise-grade fibre products and NBN Enterprise Ethernet, as well as higher wholesale revenues.

The enterprise segment also secured major customer wins, including a managed services contract with consultancy firm Tracey Brunstrom & Hammond, and a partnership with DC Alliance to deliver cloud services throughout Western Australia.

TPG Telecom chief executive and managing director Iñaki Berroeta said the company recorded
accelerating momentum through the second quarter, following easing of international travel
restrictions and lessening COVID impacts.

“Our strong competitive offering has driven growth in our mobile and fixed wireless subscriber base, positioning us to deliver improved performance as we complete our transition to a growth footing into the second half.”

“Our commitment to competition and choice is resonating with customers who continue to join our award-winning mobile brands.

“As the market for international visitors continues to recover, we expect positive momentum to
continue and look forward to welcoming more customers to our popular family of brands in the
future.”

Looking ahead, TPG said it is on track to deliver its total merger synergies of $125 million to $150 million within 2022, a year earlier than originally expected.

“TPG Telecom is transitioning to a new phase of growth following a prolonged period of market uncertainty and expects earnings momentum to accelerate in the second half of FY22 with the full run-rate benefit of a higher Mobile subscriber base, targeted on-net strategies and tactical pricing to support fixed product margins.”

“We continue to simplify our business operating model so we can offer greater value and enhance the experience for new and existing customers.

“With the regulatory progress underway for our landmark network sharing agreement, we are excited to bring real choice and competition to the millions of Australians living, working and travelling through regional Australia.”