VANCOUVER – Canada’s second-largest telco Telus is predicting its recent history of record growth in revenue and earnings per share will continue in 2008, despite a bit of a dip in the latter part of fiscal 2007.
"Telus continues to execute on all fronts as we continue to grow revenue and earnings and use our robust cash flow to make investments for future growth while maintaining an orientation to return capital to our investors through continued dividend increases and share repurchases," said Robert McFarlane, executive vice-president and CFO, in a statement this morning.
Telus is targeting six to eight per cent consolidated revenue growth, an increase of approximately $550 to $700 million, to between $9.6 and $9.8 billion. EBITDA growth is expected to be in a range of up to five per cent to up to $3.95 billion, while earnings per share (EPS) is expected to be between $3.50 to $3.80. Underlying EPS growth in 2008 is expected to be seven to 16 per cent, when adjusted to exclude the positive tax adjustments and the non-cash charge for introducing the beneficial cash settlement feature for share options that impacted the first nine-months of 2007.
“Following significant annual increases in each of the past three years, Telus recently announced a fourth consecutive annual increase of 20 per cent in the company’s quarterly dividend to 45 cents per share commencing on January 1, 2008. In addition, Telus has repurchased 12.4 million shares for $697 million to the end of November 2007. Since inception of the initial normal course issuer bid in December 2004, Telus has repurchased 51.8 million shares for an outlay of $2.47 billion,” reads today’s release.
The company also reiterated its annual 2007 consolidated and segmented guidance set out at the time of the release of third quarter results, with the exception of consolidated revenue, which has been lowered by $75 million – wireline by $50 million and wireless by $25 million.
Wireline revenue is expected to increase three to five per cent in 2008, driven largely by data. Wireline EBITDA is expected to be down one to five per cent as a result of continued competitive pressures, initial expenses related to launch of growth oriented products and services, and lower profit margins. Emergis, the subject of a $766 million takeover offer from Telus, is assumed to be included for 10 months in 2008.
Wireless revenue is expected to increase nine to 11 per cent in 2008 due to continued strong growth in wireless subscribers and increased wireless data adoption and usage. Wireless EBITDA, is expected to increase seven to 11 per cent in the year.
Capital expenditures in 2008 are expected to be approximately $1.9 billion, an increase of about $150 million. “The higher level of capital expenditures in 2008 reflects anticipated significant investments in network infrastructure to improve broadband capabilities, development of new applications, and high-speed wireless coverage and capacity. In addition, this spending supports continued vibrant housing growth in Alberta and British Columbia above the national average, and success based capital for new large contract wins in Ontario and Quebec. The 2008 capital expenditures also include continued phased investments in new converged billing and customer service systems,” says the company.
