HALIFAX – Bell Aliant today announced its 2009 financial guidance, saying it expects to “significantly improve cash flow generation by implementing a more targeted approach to capital spending, resetting its cost structure and increasing profitability.
"Our 2009 business plan and new, more nimble organizational structure that we announced in January builds on our strengths, and accelerates our ability to deliver results in more competitive and sustainable ways," said Karen Sheriff, president and CEO, in the press release.
"We are strengthening our customer relationships through service improvements and enhancing the overall experience they have with us. As part of our 2009 plan, despite a lower overall capital program, we plan to increase our investment in broadband expansion and new services by over 20% from last year, benefiting customers and delivering growth in long term revenue and profitability."
While broadband penetration growth is expected to slow, according to the company, revenue from new services, like Aliant’s IPTV offering, will keep that line item growing.
Consolidated operating revenue in 2009 is expected to be between $3.18 billion and $3.28 billion in 2009. Growth in Internet and wireless revenues is expected to mitigate declines in local, long distance, and other revenues. Information technology revenues are expected to be consistent with 2008 levels following strong revenue growth in 2008 which was largely driven by a significant IT services project, says the company’s press release.
“Capital expenditures are expected to be between 13.5% and 14.5% of operating revenue in 2009 with the program directed to align with strategic priorities, primarily growing broadband. Although overall capital intensity is expected to be lower than the 16.1% level of 2008, the 2009 capital plan includes an increase of over 20% for broadband expansion and new services spending. The prioritization of profitability growth and productivity, without significant information technology investment, is expected to be a key driver for declining capital expenditure levels from 2008,” reads the release.
EBITDA in the fourth quarter was unchanged from the same quarter a year earlier. EBITDA margin improved to 45%, up from 44.6% from the same quarter in 2007, with productivity improvements offsetting the effects of revenue declines and lower revenue margins.
Internet revenue grew by $12 million (13%) in the fourth quarter of 2008 compared to the same period in 2007. High-speed Internet subscriber growth was 10.7% and residential high-speed average revenue per customer (ARPC) grew by 6.7% over the same quarter in 2007. Other data revenues grew by $5 million (4.4%) from the same quarter in 2007, with growth in data products and IP services.
Local service and long distance revenue declined by $4 million (1.2%) and $7 million (5.7%), respectively, in the fourth quarter of 2008 compared to the fourth quarter in 2007, with network access services (NAS) 3.4% lower than a year ago. NAS declines in the quarter improved 7.5% to 41,964, down from 42,282 in the same quarter of 2007.
