Internet provide TPG Telecom has forecast a strong end to the financial year as its interim net profit nearly doubles, thanks to its $1.
56 billion takeover of rival iiNet.
TPG – the nation’s second biggest fixed-line internet provider after Telstra – has forecast annual underlying earnings before interest, tax, depreciation and amortisation of between $770 million to $775 million.
The result could be up as much as 37.5 per cent from the $484.5 million booked in fiscal 2015.
TPG on Tuesday booked a net profit of $202.5 million for the six months ending January 31, up 90 per cent from $106.7 million for the same period a year earlier.
Its interim EBITDA jumped 85.1 per cent to $437.3 million, thanks to a $111 million contribution from iiNet.
After securing approval from the nation’s competition regulator on August 20, TPG completed the acquisition on September 7.
The iiNet deal made TPG Australia’s second biggest fixed-line internet provider, bumping Singapore Telecommunication’s local unit, Optus, to third spot.
OptionsXpress analyst Ben Le Brun described the results as really good.
“I would be interested in seeing where they stand in maybe making a play into the mobile phones business, maybe taking a look at Vodafone New Zealand or even Vodafone Australia. But that’s maybe something that’s coming down the track for TPG,” he said.
TPG executives weren’t available to comment.
The company’s shares were up 74 cents at $11.09 in a flat Australian market.
The group’s consumer division booked interim EBITDA of $125.6 million, up 7.3 per cent from $117 million a year ago, thanks to 32,000 new broadband subscribers.
At the end of January, the unit had 853,000 broadband subscribers and 297,000 mobile customers.
TPG’s corporate division reported a 12 per cent jump in EBITDA of $131.9 million from $117.7 million a year ago, thanks to strong sales and continued margin expansion.
TPG INTERIM PROFIT SOARS
*Revenue rose 84 pct to $1.15b vs $627.3m
*Net profit jumped 90 pct to $202.5m vs $106.7m
*Interim dividend rose 27pct to 7.0c vs 5.5c