The share price of TPG Telecom Ltd (ASX: TPM) went up by more than 9.5% today after the telco pleased investors with two pieces of good news.
Final victory against the ACCC
The Australian Competition and Consumer Commission (ACCC) finally threw in the towel today, it won’t try to stop TPG and Vodafone Australia merging.
The ACCC concluded it doesn’t have the grounds to appeal, which would require the ACCC to establish an error of law by the judge.
Despite the outcome, the ACCC said it would continue to oppose mergers that it thinks will substantially lessen competition because it’s the ACCC’s job to protect competition to the benefit of Australian consumers.
Today, the telco announced its financial results for the half-year to 31 January 2020.
Statutory net profit was up 206% because the prior corresponding period included the impairment impact of ending its Australian mobile network build. Excluding the impairment, net profit for the first half was down 30% because of $53.7 million of Australian spectrum amortisation and a $19.6 million increase in net financing costs.
Excluding one-off costs and benefits (such as merger costs), as well as Singapore start-up losses of $1.8 million and Australian mobile network operating costs of $3.3 million, business as usual (BAU) earnings before interest, tax, depreciation and amortisation (EBITDA) was 5% lower to $404.2 million.
Pleasingly, the telco increased its BAU EBITDA FY20 guidance to a range of $775 million to $785 million, up from $735 million to $750 million.
The telco’s board also declared an interim dividend of 3 cents per share, an increase of 50% from 2 cents per share last year.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.