TPG Telecom’s profits have been flattened by NBN headwinds

(Photo by Matt Cardy/Getty Images)

TPG Telecom’s latest half year revenue was flat at $1.25 billion, up just 0.8%, as the second tier telco gets hit by headwinds from customers migrating to the NBN, Australia’s compulsory new broadband network.

Profit was down 11% to $199.9 million for the six months to January. However, underlying profit was up 4.9% to $217.7 million

TPG says its business has been hit by the migration of DSL customers to lower margin NBN and the loss of gross profit from home phones services as customers migrate to NBN bundles.

The company is building its own mobile network in Australia and Singapore. “The projected capital expenditure on both projects remains in line with original forecasts,” TPG says.

TPG upgraded full year guidance for underlying EBITDA to be in the range of $825 million to $830 million.

The company declared a fully franked dividend of 2 cents a share.

The first half 2018 numbers at a glance:

Source: TPG Telecom