TPG share price takes off as full-year profit soars 350%

A cool young man walking in a laneway holding a takeaway coffee in one hand and his phone in the other reacts with surprise as he reads the latest news on his mobile phoneA cool young man walking in a laneway holding a takeaway coffee in one hand and his phone in the other reacts with surprise as he reads the latest news on his mobile phone

The TPG Telecom Ltd (ASX: TPG) share price is in the green on Monday after the company released its full-year earnings.

Shares in the S&P/ASX 200 Index (ASX: XJO) telecommunications provider are currently up 2.22%, trading at $4.825.

TPG share price launches as earnings and dividend bolstered

Here are the key takeaways from the telco’s 2022 earnings:

  • $4.4 billion of revenue – a 1.5% jump on that of the prior comparable period (pcp)
  • $2.1 billion of earnings before interest, tax, depreciation, and amortisation (EBITDA) – a 23.6% increase
  • Excluding an accounting gain on the sale of tower assets, EBITDA grew 3.8% to $1.8 billion
  • $513 million of net profit after tax (NPAT) – a 354% jump on the pcp
  • Excluding customer base amortisation and gains from the sale of tower assets, NPAT was down 1% to $222 million
  • 9 cents per share fully franked final dividend declared – a 6% year on year increase

What else happened in 2022?

TPG saw plenty of growth last half, welcoming 300,000 new mobile subscribers – ending the year with 5.28 billion mobile customers – and continuing its 5G rollout faster than expected.

Its average revenue per user also grew 1.9% to $32.40 a month, boosted by higher international roaming levels.

TPG Telecom boasted 2.22 million of fixed customer subscribers at the end of 2022 – flat with the prior year, while its fixed wireless subscribers more than doubled to 171,000.

Looking at its enterprise, government, and wholesale leg, major customer wins included Hungry Jacks, Lifeline, and Freedom Furniture. It booked more than $150 million of total contract value in 2022.

It also delivered $140 million of annualised cost synergies from the 2020 merger of Vodafone Hutchinson Australia and TPG Corporation, offsetting inflationary pressures.

What did management say?

TPG CEO and managing director Iñaki Berroeta commented on the results driving the company’s share price today, saying:

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.

The ACCC decision not to authorise [a proposed] network sharing agreement was a significant loss for regional Australia and for consumers and businesses. TPG Telecom and Telstra Group Ltd (ASX: TLS) are challenging the decision through the Australian Competition Tribunal.

What’s next?

TPG expects to post between $1.85 billion and $1.95 billion of EBITDA for financial year 2023.

That assumes no material change in operating conditions and excludes material one-offs and transformation costs.

TPG share price snapshot

Sadly, today’s gains haven’t yet proven enough to push the stock back into the longer-term green.

The TPG share price has risen 1% since the start of 2023. Though, it’s down 12% over the last 12 months.

For comparison, the ASX 200 has gained 4% year to date and 3% over the last 12 months.

The post TPG share price takes off as full-year profit soars 350% appeared first on The Motley Fool Australia.

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More reading

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Tpg Telecom. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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