TPG Telecom FY profits dented by customers migrating to NBN

TPG Telecom has reported a 4.6% drop in full-year profit to AUS$396.9 million, pointing to higher power prices and customers migrating to the National Broadband Network (NBN).

The company’s executive chairman David Teoh said a gross profit decline in the consumer segment was “driven by broadband gross margin erosion and loss of home voice revenue, both due to the NBN rollout.”

However, the internet and mobile phone service provider managed to beat its earlier guidance for underlying earnings before interest, tax, depreciation and amortisation (EBITDA), delivering $841 million.

“Modest underlying EBITDA increase has been achieved despite the significant headwinds that were experienced during the year from the migration of DSL customers to lower margin NBN services, loss of gross profit from home phone services as customers migrate to NBN bundled services and electricity price increases,” said TPG in a statement.

The company also flagged further profit headwinds from the NBN in the current financial year, when it expects to complete a $15 billion merger with Vodafone Australia – subject to competition watchdog approval.