TPG shares tumble 20% despite $380m profit

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TPG shares tumble 20% despite $380m profit

TPG Telecom has recorded a 69 percent boost in net profit to almost $380 million for FY16, buoyed by the financial contribution of its buyout of iiNet.

iiNet contributed $242.6 million in earnings before interest, taxes, depreciation, and amortisation (EBITDA) in the almost 12 months it has been under the TPG umbrella.

TPG’s total underlying EBITDA for the year was $775.3 million, up $290 million or 60 percent on the previous financial year.

However, the carrier's share fell 21.7 percent following the results, essentially wiping out all gains made since January.

iiNet contribution

The telco attributed iiNet’s contribution to “the realisation of post-acquisition integration benefits”, as well as lower costs to access wholesale ADSL services, and an increased contribution by Tech2, which iiNet took a majority stake in in 2014.

TPG’s consumer division saw its EBITDA contribution rise from $239.7 million to $255.7 million, while its corporate division’s EBITDA jumped from $242.3 million to $269.3 million.

The telco continued to grow its broadband subscriber base, up from 821,000 to 885,000 in the past year.

iiNet subscriber numbers were relatively stable, with gains in NBN connections offset by losses in both its on- and off-net ADSL base.

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