WINNIPEG – MTS Inc. ended its final quarter of 2013 with a net loss of more than $87 million, which the company attributes to accounting charges it incurred related to the failed sale of its Allstream business division, as well as a recent Supreme Court decision involving one of its pension funds.
Consolidated revenue for MTS in 2013 was at $1.634 billion, down from $1.704 for FY2012. The company reported EBITDA of $551.3 million, down $33.9 million or 5.8% from 2012, noting that the decrease reflected the negative impact of $35.2 million in accounting costs associated with the proposed sale of Allstream.
Fourth-quarter consolidated revenue was reported at $408.5 million, down from $413.1 million in the same period a year earlier, despite growth in MTS’s wireless, broadband and converged IP and unified communications business. MTS fourth quarter operating revenues were reported at $251.4 million, while the Allstream division reported $166.3 million.
MTS wireless revenue increased by 4% in Q4 to $93.6 million, broadband and converged IP revenue rose by 10.7% to $59 million, and unified communications revenue was reported at $15.4 million, up 67% from the same period a year earlier. Those increases were offset by declines in wireless wholesale, local, long distance and legacy data revenues.
In 2013, MTS increased the number of customers with bundled services by 3.1%, to 99,456. MTS also saw some growth in wireless subscriber revenue of 7.4%, post-paid subscribers at 1.2%, and a 21.4% increase in data subscribers over 2012.
EBITDA for the company’s MTS subsidiary decreased during Q4 to $128 million, down from $144.2 million in Q42012.
Allstream’s 2013 results, meanwhile, reflect the negative impact of the rejection by the federal government back in October of its proposed sale to Egyptian investment group Accelero Capital, the company said. Revenue fell by 6.7% in the fourth quarter to $166.3 million; consolidated sales for 2013 declined by 11.2% to $673.6 million.
The costs of the rejected Allstream sale and disruption in service contributed to the 22.1% drop in the company’s earnings per share of $1.69.
On Jan 30, the Supreme Court of Canada ruled against MTS Inc. when it reinstated a lower court ruling on a lawsuit regarding the administration of one of MTS's pension plans following the company's privatization in 1997. The SCC decision means MTS must return a pension surplus of $43.3 million, which existed when the former Manitoba Telephone System was privatized in 1997, to affected workers and retirees.
The total dollar value of the judgment, estimated to be $142.1 million, has been recorded by MTS as a non-cash charge against income in the fourth quarter of 2013, to reflect the total estimated value of the pension benefits and other estimated costs.
