TPG Telecom (ASX:TPM) has upgraded its guidance for the year after releasing its half-year financial report. The company is reporting a first-half net profit after tax of $106.7m, up from $90.1m of the previous corresponding period, an 18 per cent increase. EBITDA increased 43 per cent. With help from the AAPT acquisition and improved operation efficiency, revenue rose from $394.6m to $627.3m, a 63 per cent increase. The acquisition of AAPT caused the Corporate Division EBITDA to fall from 53 to 37 per cent. However, the company was able to improve EBITDA margins of AAPT from pre-acquisition margins of 17 per cent to post-acquisition margins of 53 per cent, thereby more than offsetting the margin decrease for the Corporate Division. Earnings per share increased by 18 per cent to 13.4c per share. TPG also increased their interim dividend to 5.5c.
Shares of TPM are up 18c, or 2.04 per cent, at $9.01 per share in the early hours of trading today. TPM has a 56.94 per cent one-year return. TPM is also up 33.93 per cent so far this year. The company believes that part of their success can be attributed to additional broadband subscribes. As of January 31, TPG had 786,000 subscribers, a 4.8 per cent increase for the corresponding period. TPG beat forecasts this half-year. Citi analyst Justin Diddams commented on the strength of TPG before the report was released. “TPG continues to maintain strong customer momentum, delivering solid organic revenue and earnings growth.” TPG recently announced a $1.4bn bid for rival iiNet. However, opposition of the deal is growing. Despite the opposition, shares of TPM received a boost after the announcement of the takeover.