Telecommunications giant TPG Telecom (ASX: TPM) has booked an 11.3 per cent fall in first-half profit but the company remains optimistic and upgraded its full-year earnings guidance.
The internet provider behind groups like iiNet and AAPT posted a $198.7 million net profit for the first six months of FY18, down from $224 million a year ago when it benefited from $55.8 million in non-recurring items.
Underlying profit, which accounts for the previous year's cash benefit, increased five per cent to $217.7 million, compared to $207.5 million a year ago.
Underlying earnings also rose slightly from $417.6 million to $418.2 million. Revenue also grew to $1.3 billion from $1.2 billion. The company says this growth came from the corporate segment, TPG fibre to the building services, and cost savings from the ongoing integration of iiNet.
The group's consumer division fell compared to last year when the company included a $7 million one-off revenue.
The company blames the profit fall on broadband margin erosion and loss of home phone voice revenue on the back of the national broadband network rollout.
TPG's corporate segment's earnings rose to $158.9 million from $157.2 million a year ago, on the back of continued strong data and internet sales offsetting ongoing declines in voice revenues.
The group cut its fully franked interim dividend to two cents, down from eight cents a year ago.
Despite the profit dip the company remains optimistic and upgraded its full-year underlying earnings guidance to between $825 million and $830 million, from between $800 million and $815 million previously.
The company also reported that its mobile network builds in Australia and Singapore continue to progress well.
Shares in TPG are down 1.49 per cent to $5.95 per share at 11.27am AEDT.
Business News Australia
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