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Summary
- ASX 200 telecommunication company TPG Telecom’s share price rose by 10% on 24 August 2020 after the Group announced its half-year 2020 results on 21 August 2020.
- During 1H20, TPG Telecom reported a profit of ~A$83 million.
- The share price of ASX 200 technology company Nearmap Ltd increased by an impressive 13.011% to reach A$3.040.
- During FY20, statutory revenue of Nearmap was up 25%, and Annual Contract Value surged by 18% on pcp. The Company added a new content type in its portfolio and launched transformative Nearmap AI in June 2020.
The impact of COVID-19 pandemic has been mixed for the telecommunications, media, and technology industry. Amid the pandemic and its associated restrictions on movement in almost all countries, daily lives have changed significantly with individuals spending more time at home and consuming more data while working or home or for leisure. Several ASX200 listed companies have had to face the music due to stalled business activities and limited demand for products and services.
Due to the increased usage of data, telecommunication and technology sectors witnessed a substantial impact. The potential effects include usage & resiliency of network, changes for the customer and overall financial implications.
The growth and development of the companies in this sector now depend on their ability to reimagine their strategies as well as build business models on evolving technologies.
In this article, we will discuss 2 ASX 200 companies that witnessed significant share price rise after announcing their financial results.
Let us zoom lens for TPG Telecom & Nearmap.
TPG Telecom Share Price up 10%
On 24 August 2020, an Australian telecommunication company TPG Telecom’s share price rose by 10% to reach A$8.250. With a market capitalisation of A$13.95 billion, TPG has almost 1.86 billion shares trading on the Australian Securities Exchange (ASX).
About TPG Telecom Limited
Australian telecommunication ASX 200 listed company TPG Telecom Limited (ASX:TPG) formerly named Vodafone Hutchison Australia Pty Ltd (VHA) is engaged in offering internet, mobile and fixed-line services to its customers. The Company manages through four segments- TPG consumer, iiNet personal & business, TPG corporate, and AAPT wholesale.
TPG Telecom provides a wide range of services from ADSL2+, NBN, Fibre Optics Internet to several business networking solutions.
On 21 August 2020, TPG Telecom Limited released its first-half results for FY20 (ended 30 June 2020). Reported results for 1H20 include a full six months of the Company formerly known as VHA but only four days’ contribution from TPG Corporation Limited.
Strong start for the merged Company, Reported A$83 million profit in 1H20
- The Group reported A$A83 million as the NPAT (net profit after tax) for the first half of 2020.
- Reported revenue fell by 11% from 1H19 to A$1,540 million.
- Excluding the TPG Corporation contribution, revenue fell by 12% to A$1,513 million.
- The Group’s reported (EBITDA) earnings before interest, taxes, depreciation & amortisation for 1H20 was approximately A$531 million.
Highlights from the operational front-
- TPG Telecom has disclosed the 5G Vodafone mobile network is scheduled to reach more than 85% of the population in top six cities of Australia including Adelaide, Brisbane, Canberra, Melbourne, Perth, and Sydney by the end of 2021.
- Demand from customers for telecommunications services remains robust, driven by risen customer reliance for remote working as well as education arrangements amid COVID-19 restrictions.
- The Vodafone nbn customer base, at 150k, was up by 32% since 31 December 2019.
COVID-19 Update-
- TPG Telecom is taking a customer-centric approach to its response for COVID-19 while helping to make sure the health and wellbeing of employees as well as the community.
- While the telecommunications industry is proving to be more resilient during the COVID-19 pandemic TPG Telecom’s results for the first half of the financial year 2020 reflect a negative impact on the mobile sector of the industry.
- The ability of the Group to connect new customers was also impacted during March and April when call centre capacity was momentarily diminished due to local lockdown restrictions in India.
Although the Company disclosed that operations have now returned nearly to full capacity, higher costs are being incurred due to alterations in service delivery.
GOOD READ: TPG Telecom Under Spotlight: Commenced Trading on ASX on An Ordinary Settlement Basis
Outlook-
- The Group will continue to prioritise activities to understand merger synergies while responding to the ongoing COVID-19 pandemic.
- The priorities of TPG Telecom include accelerating its 5G mobile network, increasing market share of households by offering converged products, increasing Enterprise market share, owned infrastructure broadband opportunities, as well as efficiencies across the business.
- The telecommunications industry is growing to be more resilient than many sectors due to improved customer reliance on services, and TPG believes demand for fixed-line services to remain stable.
However, TPG Telecom anticipates continued challenging conditions in mobile due to existing global travel restrictions.
Iñaki Berroeta, TPG Telecom Chief Executive Officer, stated-
ALSO READ: The tale of gigantic Telecommunications industry.
Nearmap Share Price Rose ~13% to cross A$3.000-mark
On 24 August 2020, the share price of Nearmap was trading at A$3.040, climbing by 13.011%. The market capitalisation of NEA was recorded at A$1.22 billion, with nearly 453.66 million shares on the ASX.
About Nearmap Ltd
ASX-listed technology-driven company Nearmap Ltd (ASX:NEA) is one of the few global companies that possess a rich and continually expanding data providing high-value insights to government organisations as well as a diverse range of businesses.
Nearmap Ltd’s FY20 Revenue Increased 25%
On 19 August 2020, Nearmap updated the market with its financial results of 2020 (year ended 30 June 2020), with increased revenue and annualised contract value. The Group generates revenues in two main geographic regions, Australia, and New Zealand (collectively called ANZ), and the US and Canada (together called NA).
Quick highlights from FY20 Results-
- Statutory revenue for FY20 rose by 25% to A$96.7 million compared to total revenue for FY19 of A$77.6 million.
- ANZ revenue increased by 13% to A$60.2 million compared to pcp, while NA revenue rose 49% to nearly A$36.5 million compared to prior year total revenue of A$24.5 million.
- The surge in revenue is linked to the 18% growth in the Annual Contract Value portfolio over the same period, and key drivers for the growth are New business, Net upsell and Churn.
- Group EBITDA for the financial year 2020 is down by 41% to A$9.1 million compared to the previous year.
- FY20 Group NPAT of Nearmap dwindled by 146% to A$36.7 million as compared to the fiscal year 2020.
Moreover, the balance sheet of Nearmap remains robust without any debt and a closing cash balance of A$36.1 million as of 30 June 2020.
Highlights from the operational front-
- The Company continues to examine the impact of COVID-19 on trading conditions.
- Annualised Contract Value (ACV) portfolio growth has continued with trading conditions seven weeks into the fiscal year 2021 consistent with the growth for the same period during FY19.
- During the fiscal year 2020, the Company continued to add new content type in its portfolio and launched transformative Nearmap AI in June 2020.
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Outlook-
- Nearmap remains well-positioned to continue its strong growth trajectory and stay focused on its customers and core growth verticals in the financial year 2021.
- During FY21, Nearmap will continue to focus on customers and elevating their experience with the Company.
Dr. Rob Newman, Managing Director & Chief Executive Officer commented on outlook-
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