IiNet contributed $242.6 million in earnings before interest, taxes, depreciation, and amortisation (EBITDA) in the nearly 12 months it has been under the TPG umbrella.
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TPG revealed during an analyst call that it will be spending more money to “protect their market share”, amid rising competition in the broadband space, Morningstar analyst Brian Han told AAP.
Research firm Telsyte principal analyst Foad Fadaghi said TPG had been a darling of the investment community and had been priced highly in recent years with continued growth and more acquisitions expected.
TPG Telecom has reported a 69 per cent jump in annual net profit, bolstered by a jump in revenue.
According to TPG, as of July 31, iiNet had delivered a “maiden contribution” of $248.9 million in the 11 months since its acquisition, but also ate up $6.3 million of restructuring costs from integration activities associated with the acquisition.
The loss in value was attributed by analysts to an “earnings miss”, with shares down by AU$2.53, or 21.4 percent, to AU$9.28 at the end of Tuesday. “If successful, we will move quickly to establishing a substantial Singapore operation with strong local management and mobile expertise”, TPG said in its results presentation.
It was previously noted that the potential victor of the first phase would have to pay around SG$35 million.
TPG Telecom’s shares have today taken a tumble following release of its financial year 2016 results.
Net profit rose 69 per cent to $379.6 million, underpinned by new customers and the contribution from iiNet.
The 2017 guidance was set at an underlying EBITDA in the range of $820 million to $830 million, a rise of 6% or better.
Revenue for the 12-month period was AU$2.388 billion, up 88 percent from AU$1.271 billion. TPG/AAPT corporate revenues, by comparison, were relatively stable, rising by nearly 2% to AUD655 million.
TPG’s consumer business added 64,000 broadband customers over the year, taking the total to 885,000, while iiNet had 983,000 broadband subscribers.
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For the year under review, TPG Telecom generated a total turnover of AUD2.388 billion (approximately USD1.8 billion), up from AUD1.271 billion, with nearly half of that attributed to iiNet, which saw revenues of AUD1.059 billion in FY 2016.
