TPG Telecom’s (ASX:TPG) H1FY22 earnings fall; is THIS the real reason?

2 min read | August 19, 2022 01:43 PM AEST | By Ritwika

TPG Telecom’s (ASX:TPG) H1FY22 earnings fall; is THIS the real reason? — Image source: © Lovelyday12 | Megapixl.com

Highlights:

TPG Telecom released its fully audited H1FY22 results on Friday (19 August 2022).

The company gained momentum in the second quarter of FY22 and delivered service revenue of AU$2,190 million in H1FY22.

TPG’s profit almost doubled as it recorded an NPAT of AU$167 million in H1FY22, compared to AU$78 in H1FY21.

The telecom giant will pay a fully franked interim dividend of 9 cents per share to its eligible shareholders.

Leading telecommunication service provider TPG Telecom Limited (ASX:TPG) shared its half-year results (H1 FY22) for the period ended on 30 June 2022. The company’s revenue gained by 0.7% in the given period. The company also demonstrated strong growth in NPAT in the given period. The robust financial result was primarily driven by a significant increase in subscribers for the company’s mobile and fixed wireless services.

Details of TPG’s performance in H1 FY22:

TPG Telecom delivered revenue of AU$2,190 million in H1 FY22, up 0.7% compared to the previous corresponding period (H1 FY21).
TPG reported delivering AU$837 million as earnings before interest, tax, depreciation and amortisation (EBITDA) in H1 FY22, down 5.3% from the previous corresponding period. It includes an additional charge of AU$35 million used for restructuring and simplifying the organisation.
Excluding the cost of restructuring and simplification, TPG’s EBITDA fell by 1.4% in the given period, indicating higher NBN wholesale charges and the rising cost of mobile phones.
TPG Telecom’s net profit after tax (NPAT) surged to AU$167 million in FY22, compared to AU$78 million in H1FY21.
In the first half of FY22, TPG Telecom’s mobile and fixed wireless subscriber numbers rose to 135,000 and113,000, respectively.

However, today TPG’s shares on ASX have fallen significantly during the early trading hours. TPG’s share price dropped by 11.178% to AU$5.88 per share at 10:54 AM AEST on Friday (19 August).

TPG’s dividend distribution plan:

The board of TPG Telecom has determined to distribute a fully franked interim dividend worth 9 Australian cents per share to its eligible shareholders based on its earnings in H1 FY22. The dividend amount represents a payout ratio of 51 Australian cents of adjusted NPAT of AU$331 million.

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