TPG half-year profit doubles to $203m after iiNet takeover

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TPG half-year profit doubles to $203m after iiNet takeover

TPG Telecom has boosted its profits by 91 percent following the takeover of fellow telecommunications provider iiNet last year.

The publicly listed telco reported a net profit of $203 million for the half year ending 31 January, compared to $106 million from the same time last year.

EBITDA grew by 85 percent to $437 million, $107 million of which was from iiNet. Revenue was also up by 84 percent to $1.1 billion.

TPG finalised the $1.56 billion acquisition of iiNet in August last year after months of due diligence and a competing bid from rival M2 Group for $1.6 billion. M2 later merged with another Perth-based telco, Vocus, in February this year.

The addition of iiNet brought on an additional 989,000 broadband customers, bringing the total to 1.8 million subscribers across TPG, iiNet, Internode and Westnet.

The mobile subscriber base grew to 473,000, which includes 176,000 subscribers from iiNet. Without the additional iiNet customers, TPG’s overall mobile subscriber base would have dropped by 23,000.

In September, TPG announced it was switching mobile subscribers from Optus’s 4G network to Vodafone’s network over the next three years. The rollout is expected to cost between $300 million and $400 million in capital expenditure during that time.

TPG’s consumer business brought in more revenue than its corporate business for the first time, with $330.9 million compared with $325.2 million. iiNet brought in $496.9 million in revenue for the five-and-a-half months since it was acquired.

The company attributed the growth to the three months of lower access costs from the Australian Competition and Consumer Commission’s fixed access determination.

At 11:30am Tuesday, TPG’s shares were $10.91 - up 5 percent from the previous day.

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