Australian telecommunications company, TPG Telecom Limited (ASX: TPM) has announced its half year results for FY 2019. For the half-year period, the company reported Earnings before interest, tax, depreciation and amortization (EBITDA) before impairment of $420 million and Net Profit After Tax of $46.9 million. These results include $4.4 million of one-off transaction costs relating to the planned merger with Vodafone Hutchison Australia. Further, the company also recognized an impairment expense of $227.4 million in its half-year results, arising from the Group’s decision to cease the rollout of its Australian mobile network.
If the above-mentioned irregular items are excluded, the company is having an underlying EBITDA of $424.4 million and underlying NPAT of $225.2 million. The underlying NPAT is 3.5 percent higher than the previous corresponding period (pcp). Further, the company reported an underlying EPS 24.3 cents per share for 1H FY19, up 3.3% on pcp.
For the half-year period, the company reported Consumer Segment EBITDA of $243 million which is slightly lower than the EBITDA of $255.2 million for 1H18. This movement includes a $24.8 million decrease in gross profit which was partially offset by a $12.6 million decrease in employment and overhead costs.
The company reported Corporate Segment EBITDA of $182.5 million for 1H FY19 compared to $158.7 million for 1H FY18. This $23.8m increase in the EBITDA was mainly due to a significant step up in the contribution from the contract to provide fibre services to Vodafone Hutchison Australia (VHA), complemented by other on-net fibre sales. Further, the company reported the Corporate Segment EBITDA margin of 48% in 1H19 compared to 42% in 1H18.
For the half-year period, the company reported a total capital expenditure of $556.7 million which includes a $352.4 million instalment for the 2x10MHz of 700MHz spectrum acquired at auction in 2017. The capital expenditure also includes $66.1 million invested in the (now ceased) Australian mobile network build and $39.8 million in the Singapore mobile network build. As at 31 December 2018, the company had net debt of $1,567.6 million which represents a leverage ratio of around 1.85x annualized underlying EBITDA.
The Company’s Board has declared an interim dividend of 2.0 cents per share (fully franked), payable on 21 May 2019 to shareholders with the registration date of 16 April 2019.
Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $7.140, up by 4.386% during the day’s trade with a market capitalization of ~$6.35 billion as on 19 March 2019. The counter opened the day at $6.800 and reached the day’s high of $7.160 and touched a day’s low of $6.750 with a daily volume of ~1,824,649. The stock has provided a year till date return of 8.74% & also posted returns of -21.56% and 1.48% over the past six months and three months period respectively. It had a 52-week high price of $9.650 and touched 52 weeks low of $5.030, with an average volume of ~ 1,316,462.
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