TPG grows broadband base ahead of iiNet acquisition
- 24 March, 2015 09:59
As it prepares to consume iiNet, TPG has revealed strong growth in its broadband business for the six months ending 31 January 2015.
TPG reported $106.7 million in net profit after tax, up 18 per cent from the same period last year. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 43 per cent to $236.2 million.
TPG’s corporate business contributed an EBITDA of $117.7 million for the period, nearly double the $64.5 million from the same period last year. TPG said a big reason for the increase was the $450 million acquisition of AAPT in February last year.
On the consumer side, TPG added 38,000 broadband subscribers, ending the half year with 786,000 broadband customers. In the same period last year, TPG added 36,000 customers. About 55 per cent of the 38,000 additions were ADSL and 45 per cent were NBN or fibre to the basement, TPG said.
However, TPG continued to lose mobile subscribers, ending the half with 342,000 mobile subscribers at the end of the half. At the end of January 2014, TPG had 370,000 mobile subscribers.
TPG attributed the decline to a price increase and the fact that it still only offers a 3G service. With Amaysim announcing 4G plans earlier today, TPG is one of the only 4G holdouts left among Optus mobile wholesale customers.
Overall, however, the consumer group was profitable. The consumer division contributed $117.1 million in EBITDA, up from $100.2 million in the same period last year.
TPG increased its guidance for fiscal-year 2015 to $480-483 million, up from its original estimate of $455 to $460 million.
TPG announced its planned $1.4 billion acquisition of iiNet on 13 March. The acquisition, which will boost TPG's broadband customer base to more than 1.7 million, received unanimous support of iiNet's directors.
However, the deal is not yet complete, with iiNet shareholders expected to vote on the acquisition in June. The acquisition is also subject to court and regulatory approval by the Australian Competition and Consumer Commission (ACCC).
On a media call yesterday, iiNet chairman Michael Smith and CEO David Buckingham defended the deal after criticisms from iiNet founder Michael Malone and others. The iiNet directors said their decision to sell was principally driven by the “stunning” $1.4 billion price tag offered by TPG.