TPG Telecom has delivered better-than-expected half year earnings as its takeover of iiNet pays off but the telco remains coy on its ambitions to expand into the local mobile market.
The company's net profit jumped 11 per cent to $224 million in the six months to January 31, driven by improved earnings from iiNet and 69,000 new broadband subscribers.
TPG shares jumped as much as eight per cent on the results.
The company - which is run by low-key founder David Teoh - says it has made a "strong start" to the rollout of its mobile network in Singapore, setting up a local office and hiring staff after securing spectrum in a government auction in December.
TPG expects to spend up to $381 million to become the fourth mobile network operator in Singapore, and has indicated a strong interest in entering the fiercely competitive Australian mobile market.
Chief financial officer Stephen Banfield was tight-lipped on Tuesday on whether the group planned to bid for spectrum in April's Australian government-run auction, but downplayed speculation of a possible capital raising.
"It's well known that the 700 megahertz spectrum auction is very soon - we're not willingly to confirm at this time whether we will be bidding, but we are conscious that it has been widely speculated that we may need to raise capital to pursue such a strategy," he said.
"So we'd like to state that it is our strong desire not to raise capital."
If TPG was to secure spectrum, it could become the fourth mobile operator in Australia after Telstra, Optus and Vodafone Hutchison.
At present, TPG offers mobile services to customers by using Vodafone's network.
TPG's half-year underlying earnings rose 13 per cent to $418 million, and the company expects to deliver full-year underlying earnings of between $820 million and $830 million.
For iiNet, earnings rose by almost $35 million to $142 million, helped by the absence of integration costs that affected results in the previous half, and stronger margins.
TPG completed its acquisition of iiNet in September 2015, making it Australia's second biggest fixed-line internet provider after Telstra.
The bulk of the group's new broadband customers came from its TPG brand, taking its total broadband base to 1.91 million.
TPG shares were up 37 cents, or 5.6 per cent, at $6.99 at 1415 AEDT.
TPG INTERIM PROFIT JUMPS
* Half year net profit up 11pct to $224m
* Revenue up 8 pct to $1.24b
* Interim dividend up 1 cent to 8 cents
