TPG Telecom Earnings: Cash Flow and Cost Progress Becoming More Evident

The highlight of TPG's 2024 first-half result was the AUD 163 million swing in free cash flow to AUD 18 million. Granted, AUD 97 million of this swing was due to lower receivables from reduced mobile handset demand, a competitive dynamic that led to lower-than-expected revenue growth of 2%. However, it is still cash in the coffers. It reflects reduced capital expenditures from recent peaks (down 15% in first half, excluding AUD 128 million in spectrum payments) and the unwinding of handset receivables financing. As a result, corporate net debt/EBITDA (less lease interest) remained at 2.2, establishing a solid foundation as the group cycles past the recent heavy investment cycle.