Australian internet service and telecommunications company TPG Telecom [ASX:TPG] released FY22 full-year results, reaching net profit after tax (NPAT) of $513 million and EBITDA of $2.1 billion.
Service revenue increased by 1.5% to $4.4 billion over the year, and the telecom declared a final dividend of 9 cents per share.
For the total financial year, the group’s dividend totalled 18 cents, an increase of 9% year-on-year.
TPG rose by almost 5% in the share market by around midday on Monday, trading at $4.94 a share.
The company has had a degradation of 11% for the value of its stock in the past year, however, and is also down more than 14% in the wider market:
Source: tradingview.com
TPG delivers strong 2022 result post tower sale
TPG’s 2022 financial year was propelled by service revenue increasing by 1.5% to $4.44 billion as it noted a return in mobile subscribers.
EBITDA (earnings before interest tax, depreciation, and amortisation) overturned $2.13 billion. This is an increase of 23.6% year-on-year. NPAT came to $513 million, up from $113 million in FY21.
These results included contributions from the group’s tower assets sale to OMERS Infrastructure Management, which added $402 million in gains.
Without the tower assets gains, the group said its EBITDA was still up 3.8% with $1.79 billion, and NPAT was $222 million.
These results were underpinned by the net increase in mobile subscribers, which went up 300,0000, but also with a plans and pricing refresh that has successfully taken off and an improved fixed wireless segment, helped along by NBN repricing.
Receiving $140 million in annualised merger cost synergies has meant the company was also able to offset inflationary pressures over the latter half of the year.
The group says its balance sheet has been strengthened with reduced net debt following the tower assets sale, and its 5G regional rollout is surpassing initial expectations, with more than 2,000 mobile sites completed to date.
Iñaki Berroeta, TPG’s Chief Executive Officer and Managing Director stated:
‘These results reflect solid execution of our strategy as we benefited from renewed customer activity throughout 2022. The operational and strategic foundations we have put in place are translating to an improving financial performance, which we expect to gather momentum through 2023.’
TPG dividends and FY23 expectations
TPG’s network investment programme is expected to reach an additional 1,000 new 5G mobile upgrade sites in 2023, with a similar number planned each year to 2025.
The ACCC did not pass the proposed networking sharing deal with Telstra, yet TPG did not note any material financial impacts in its FY22 results.
The company declared a fully franked final dividend of 9 cents per share, up 0.5 cents per share on FY21.
Total dividends declared for FY22 were upped to 18.0 cents per share, representing a payout ratio of 51.6% of Adjusted NPAT of $646 million, which is in line with TPG’s policy to pay out at least 50% of Adjusted NPAT.
TPG expects its EBITDA guidance in FY2023 to hit the range of $1.85 to $1.95 billion, not including material one-offs and transformation costs.
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