TPG posts profit turnaround and lifts dividend as Mobile drives 1H26 momentum
In its 1H26 investor presentation for the half year ended 30 June 2026, TPG Telecom (ASX: TPG) outlined a return to profit on a Pro Forma basis, reporting statutory net profit after tax (NPAT) of $35m, up from a –$20m 1H25 Pro Forma loss.
EBITDA rose to $821m (+4.7%), and the Board lifted the interim dividend to 10.0 cents per share (up 11.1%), franked at 25%. Management attributed the result to Mobile growth, disciplined cost control and materially lower borrowing costs following the company’s 2025 debt reduction.
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1H26 results at a glance
The presentation detailed headline metrics on a Continuing Operations basis, with all growth measured against the 1H25 Pro Forma comparative, which restates the prior period as if the new commercial arrangements from the Vocus Transaction had been in place.
| Metric | 1H25 Pro Forma | 1H26 | Change |
|---|---|---|---|
| Service Revenue | $2,060m | $2,071m | +0.5% |
| Gross Margin | $1,291m | $1,329m | +2.9% |
| EBITDA | $784m | $821m | +4.7% |
| NPAT | –$20m | $35m | Return to profit |
| Underlying NPATA | $17m | $70m | +$53m |
| Underlying EPS | 0.9¢ | 3.6¢ | +2.7¢ |
| ROIC | 4.83% | 6.07% | +1.24ppt |
| Operating Free Cash Flow | $171m | $199m | +16.4% |
| Free Cash Flow to Equity | –$15m | $93m | +$108m |
Management noted the +$108m swing in Free Cash Flow to Equity was driven by materially lower borrowing costs, reflecting the impact of debt repayments completed in FY25.
Mobile powers the result
The presentation positioned Mobile as the primary growth engine for the half. Key figures highlighted include:
- Mobile subscribers +64k to 5,806k (+1.1%)
- Mobile Service Revenue $1,224m (+3.1%)
- Mobile Gross Margin +4.2%, outpacing service revenue growth
- Mobile ARPU $35.21 (+0.7%), with the strongest gains in Prepaid (+4.6%) and Digital First (+2.8%)
- Digital First subscribers +7.9% and MVNO subscribers +25.1%
Management outlined that network coverage increased to 99% of the population, contributing to approximately 1ppt of subscriber share growth and consistently lower port-outs since the MOCN launch. The company also detailed new MVNO contract wins with Zip, Swoop and Spacetalk.
Looking ahead, management indicated total ARPU growth is expected to accelerate in 2H26 following plan refreshes carried out between May and August.
Home Broadband stabilising
While Home Broadband subscribers declined, the presentation pointed to improving momentum across the segment. Key points included:
- Fixed subscribers of 1,941k (down 42k / –2.1%), with the NBN base down 41k
- NBN churn reduced 1.1ppt versus 1H25, with high-speed (NBN100 plus) now 56% of the NBN base
- Fixed Wireless returned to growth in 2Q26, with 5G now representing more than 70% of Fixed Wireless subscribers
Management anticipates improved subscriber performance and stronger Average Margin per User (AMPU) in 2H26, supported by positive momentum recorded in July and August.
What MOCN and the Vocus transaction mean
Two structural factors underpin the reported improvements, and understanding both helps clarify the numbers.
MOCN stands for Multi-Operator Core Network sharing. In practical terms, it allows TPG to share radio network capacity, expanding regional coverage without carrying the full capital cost of building out its own infrastructure. The presentation noted a 150% increase in regional data usage following the MOCN rollout.
The “Pro Forma” comparisons appear throughout the results because the Vocus Transaction, which included a fibre sale and new wholesale access agreements, changed the company’s cost base. To create a like-for-like comparison, the 1H25 figures are restated as if those arrangements had been in place during the prior period.
For investors, these two factors explain why margins and coverage are improving, and why comparatives are presented on an adjusted basis rather than raw statutory numbers.
A transformed balance sheet and rising returns to shareholders
The presentation detailed a substantially strengthened capital position as the driver behind both profit growth and the higher dividend. Key points included:
- Net bank interest reduced to $37m, down from $122m, following FY25 debt repayments
- Debt to EBITDA of 0.8x, down 1.5x
- Total bank facilities reduced by $400m in 1H26
- Refinancing of FY28 maturities expected to complete by Q4 FY26
The interim dividend of 10.0 cents (up from 9.0 cents) is franked at 25%, which management stated is sustainable over the medium term. The Board also expressed an intention to increase the dividend over time in line with sustainable growth in profit and cash flow.
Management commentary
“1H26 momentum positions TPG for a stronger second half and continued growth into FY27,” was the central theme conveyed by Iñaki Berroeta, CEO and Managing Director, in the presentation’s key messages.
FY26 guidance and the road ahead
Management reaffirmed full-year guidance and set out the medium-term direction of the business.
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FY26 EBITDA guidance of $1,665m to $1,735m was left unchanged, compared with the FY25 Pro Forma outcome of $1,637m.
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FY26 capex is expected to be approximately $750m on an additions basis (excluding spectrum), reducing to around $650m in FY27 and falling within a $550m–$650m range in FY28.
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The company is targeting approximately $100m of operating cost efficiencies (before inflation) by FY29, with around $46m of real savings delivered since the start of FY25.
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Free Cash Flow to Equity is expected to be stronger in 2H26, supported by higher earnings and lower capex.
The presentation closed on an investment case built around improving ROIC, growing underlying EPS and a de-risked balance sheet, which management framed as underpinning a combined growth-and-income proposition heading into FY27.
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