TPG(TPG) - 2025 H1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a 2.2% increase in service revenue, primarily driven by mobile, with modest growth in fixed services [10][28] - Statutory EBITDA increased by 1%, reaching $618 million, while pro forma EBITDA was $786 million, reflecting a growth of 0.9% compared to the previous year [32][38] - Net profit after tax (NPAT) was significantly up, reaching $32 million, attributed to improved operating performance and lower financing costs [33] Business Line Data and Key Metrics Changes - The mobile subscriber base grew by 100,000, with strong growth from digital-first brands TPG and Felix, despite a decline in international arrivals [5][12] - Fixed service revenue saw a slight increase of just under 1%, with fixed wireless now representing 14% of total fixed subscribers [20][21] - Average revenue per user (ARPU) for postpaid increased by 14.5% over the last three years, while total ARPU rose by 7.8% [14] Market Data and Key Metrics Changes - The company gained market share in both metropolitan and regional centers, with domestic growth in postpaid services coming at the expense of competitors [5][12] - The NBN market remains competitive, with intense competition impacting subscriber numbers for larger incumbents [21] Company Strategy and Development Direction - The company plans to return $3 billion in cash to shareholders and increase minority ownership through a reinvestment plan [7][48] - A focus on customer well-being and accessibility is part of the company's three-year roadmap to ensure fair access to essential connectivity [24] - The company is committed to maintaining a disciplined approach to operating expenses, targeting flat growth in nominal terms through to 2029 [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum in the mobile segment, although they expect a more moderate performance in the second half of the year [63] - The government’s revitalized student visa program for 2026 is expected to positively impact the company’s mobile business [16] - Management acknowledged the challenges in the fixed market but emphasized the importance of maintaining profitability and improving service offerings [82] Other Important Information - The company has taken steps to address a recent cyber incident affecting iINET customers, with ongoing support measures in place [7][9] - The company has successfully canceled $1.7 billion in bank loans as part of its capital management plan [44] Q&A Session Summary Question: Mobile subscriber growth expectations for the second half - Management does not provide specific guidance on customer numbers but remains optimistic about continued growth, albeit at a moderated pace [63] Question: ARPU for digital-first brands - Management indicated that ARPU for digital-first brands is likely in the mid-twenties, with consistent growth across different brands [64] Question: Pricing strategies in the mobile industry - Management acknowledged the challenges posed by tier-two operators and the need for pricing adjustments in the market [62][66] Question: Margin differentials between digital brands and traditional prepaid - Management noted that the margin differential is significant, with digital brands benefiting from lower operational costs [73] Question: CapEx for LEOSAT opportunities - Management highlighted that investments in LEOSAT will be smaller compared to terrestrial networks, with potential for future monetization [79] Question: Fixed subscriber trends and market competition - Management expressed confidence in maintaining profitability in the fixed segment despite competitive pressures [82]