TPG Telecom Limited (ASX:TPG) Declares Final Dividend and Announces $5.25 Billion Asset Sale at 2025 AGM
Financial Performance
TPG Telecom Limited reported a 1.5% increase in service revenue for 2024, reaching $4.7 billion. EBITDA grew by 3.4% to $1.988 billion, aligning with guidance. The company achieved a higher return on capital invested and improved operating free cash flow by over three times to $672 million.
Dividend Declaration
The Board declared a final dividend of 9.0 cents per share for 2024, making the total dividends for the year 18.0 cents per share, consistent with 2023. The dividend was unfranked due to the utilisation of remaining historical franking credits against the interim dividend.
Strategic Initiatives
In 2024, TPG Telecom secured regulatory approval for a regional network sharing arrangement with Optus, expanding its mobile network coverage to 98.4% of the Australian population. Additionally, the company announced the sale of its fibre network infrastructure assets and Enterprise, Government, and Wholesale fixed business to Vocus Group Limited for up to $5.25 billion. This transaction, pending further regulatory approvals, aims to streamline operations and enhance financial flexibility.
Future Outlook
TPG Telecom plans to use the proceeds from the Vocus transaction to strengthen its capital structure and support long-term growth. The company expects EBITDA for 2025 to range between $1,950 million and $2,025 million, with operating free cash flow set to improve significantly due to reduced capital expenditure and enhanced working capital movements.
Motley Fool contributor Lianne Eastty has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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