VANCOUVER – Telus Corporation reported a slim 1% growth in revenue for its first quarter, and lowered its full-year guidance accordingly.
Revenue for the quarter ended March 31, 2009, was $2.375 billion, an increase of $25 million, led by a 3% growth in wireless revenue and a 6% growth in wireline data revenue, which the company said more than offset its on-going declines in local and long distance wireline revenues.
The Burnaby, BC based telecom company lowered its 2009 guidance to “reflect the worsening Canadian economy since (December 2008), weaker than expected wireless results at Telus and the industry in the first quarter”.
"Clearly, Telus’ wireless results do not meet the expectations we set late last year and are reflective of the weakening Canadian economy and competitive activity," said president and CEO Darren Entwistle, in the press release. "Given the current environment, Telus has accelerated our efficiency initiatives. Accordingly, we have significantly increased our restructuring cost estimate for this year to approximately $125 million to drive efficiency and enhance our competitiveness."
The company’s “efficiency initiatives” included the loss of 1,160 full time employees since December, with “permanent domestic reductions” of about 500 jobs due to attrition, seasonal reductions and Telus International’s business process outsourcing services, the release detailed. In its analyst conference call Thursday, Telus executive vice president and CFO Robert McFarlane said that the company could cut another 1500 staff.
Wireless net subscriber additions were 48,000, a decrease of 46% from the same period a year ago, while ARPU (average revenue per subscriber unit per month) dropped 5.6% to $58.39 compared to the first quarter in 2008.
The company added 14,000 high-speed Internet subscribers, a 30% drop from a year ago, due to "a maturing market, on-going competition, and reduced household formation".
Telus TV surpassed 100,000 customers in April, the first time that the company has reported subscriber numbers for its IP-based TV service. The company also announced plans to launch Telus Satellite TV later this year, a move it says will “enhance” its TV service by extending “the coverage of (its) entertainment offering".
Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) decreased by 4.5% due to increased defined benefit pension plan expenses and investments in operating efficiency initiatives that resulted in a $21 million increase in restructuring costs, the release continued. Underlying EBITDA increased $7 million, or nearly 1%, if pension and restructuring costs are excluded.
Net income in the first quarter was $322 million, an increase of 10%, though after excluding income tax-related adjustments in 2008 and 2009, net income was down 5% due to lower operating earnings. Cash provided by operating activities was down 3% to $614 million this quarter, while free cash flow was down 76% to $125 million.
