TPG Telecom lifted its interim dividend 11.1 per cent to 10 cents a share on Friday after a half year in which mobile did the work and fixed broadband went backwards. Group service revenue for the six months to 30 June was $2,071 million, up 0.5 per cent.
Mobile service revenue rose 3.1 per cent to $1,224 million and mobile gross margin rose faster, up 4.2 per cent to $1,022 million. Home broadband service revenue fell 1.9 per cent to $827 million. The company added 64,000 mobile customers to reach 5,806,000, and lost 42,000 home broadband subscribers to finish at 1,941,000.
Almost all of that broadband loss came off the NBN. TPG's NBN base fell 41,000 to 1,527,000. Its fixed wireless base grew, and the company says more than 70 per cent of those services now run on 5G. The difference matters to the accounts: on an NBN service TPG pays a wholesale price set by the network operator, and on its own fixed wireless it does not.
Two earnings numbers were published and they are not the same. EBITDA was $821 million, which is up about 1 per cent as reported and up 4.7 per cent, or $37 million, on the pro forma basis the company prefers. Statutory net profit after tax was $35 million, up 9.4 per cent. Underlying NPATA was $70 million, up $53 million on the prior half, with underlying earnings per share of 3.6 cents against 0.9 cents.
The EBITDA margin went from 32.1 per cent to 33.9 per cent. Operating free cash flow rose 16.4 per cent to $199 million. Capital expenditure in the half was $431 million, and the company guided to roughly $750 million for the full year, about $650 million in 2027 and between $550 million and $650 million in 2028 excluding spectrum. Full year EBITDA guidance is $1,665 million to $1,735 million.
Chief executive Inaki Berroeta said the result showed "the benefits of network sharing and the strength of our multi-brand strategy" and that the company "grew earnings and maintained positive momentum across the business". The network sharing he refers to is the regional arrangement that lets TPG carry traffic without building the towers, and it is a cost line rather than a revenue line.
The dividend is franked at 25 per cent, so an Australian shareholder collects franking credits on a quarter of it and pays full marginal tax on the rest. The stock closed the session at $3.68, up 4.25 per cent. The shares go ex-dividend on 27 August, the record date is 31 August and payment is 29 September.
The half tells a consistent story about where margin now sits in Australian telecommunications. Growth is in mobile and in the wireless the company owns outright. The line that shrank is the one that runs over the public network, where the wholesale price is set elsewhere and the retailer keeps what is left. TPG reports its full year result early next year.
