TPG Telecom shares sink as telco misses analysts' expectations
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More news: Shares in TPG Telecom dived 6.6% to $5.01 by 11:25am AEDT, after the Sydney-based telco's net profit plunged 90% year on year.
Jarden analysts said that while FY23 revenue — which grew 9.3% compared the the prior corresponding period — was in line with expectations, its FY24 guidance of $1.95 billion to $2.03 billion sat 3.6% below Jarden's midpoint expectation of $2.06 billion.
According to Jarden, TPG also posted a "large and unexpected sequential increase in lease interest costs in 2H23", which jumped from $75 million in FY22 to $121 million.
TPG Telecom full-year profit tanks 90%
The news: TPG Telecom reported a full-year net profit 90% lower than a year earlier, as increased tower leasing prices and interest rates hiked costs.
The numbers: The company's statutory net profit after tax tumbled from $513 million to $49 million during the year to December 2023, compared to the prior corresponding period.
However, while statutory EBITDA dropped 12.2% to $1.88 billion, underlying EBITDA — excluding a $17 million impairment charge and $69 million of transformation and transaction costs — rose 9% to $1.96 billion.
Revenue from TPG's mobile service climbed 9.3% to $2.2 billion, after bringing in 175,000 new customers as a wave of Optus customers changed networks following last year's national outage.
TPG declared a final dividend of 9 cents per share, the same as a year earlier.
The context: Australia's third biggest telco TPG Telecom said that the year-on-year NPAT plunge was primarily due to the one-off gain in FY22 from its $402 million sale of passive tower and rooftop assets.
The company said higher depreciation and amortisation costs reflecting new leases and network and IT investment, and higher market interest rates, also contributed to the decline.
What they said: TPG's CEO and managing director Iñaki Berroeta said: "We are confident in the outlook for strong improvements in cash earnings over the next few years, supporting returns for shareholders as the working capital, capital investment and interest cost cycles reduce from currently elevated levels".
The source: ASX announcement
