WINNIPEG – In the midst of a transformation at MTS and the planned sale of its Toronto-based Allstream unit, MTS Allstream said late Wednesday that it’s all about free cash flow.
For the third quarter ended September 30, 2015, the company said that consolidated free cash flow grew 48% to $45.1 million year-over-year. Looking ahead, it has identified and actioned $60 to $70 million in annual free cash flow improvements at Allstream and identified another $100 million at MTS, $30 to $40 million of which is being actioned in Q4 2015.
"The Company is making solid progress on all three of its strategic imperatives," said president and CEO Jay Forbes, in a statement. "Allstream's turnaround is well underway, we have launched the transformation of MTS into a customer-first organization, and the planned exit of Allstream is proceeding in line with expectations. To date, we have identified and actioned $90 to $110 million in annualized free cash flow improvements, and have line-of-sight to an additional $60 to $70 million."
Consolidated revenues for the quarter of $398.4 million were down 1% from $402.4 year-over-year. MTS saw a $1.2 million decrease in revenues from Q3 2014, a result of lower wireless voice and long distance revenues, partly offset by growth in wireless data, Internet, information solutions and IPTV revenues. Allstream revenues decreased by $4.8 million compared to Q3 2014 due to declines in local, long distance and other data revenues, partly offset by strong growth in converged IP revenues which were up $5.9 million or 8.9%.
Consolidated EBIDTA of $135.1 million decreased 3.6% from the same period last per cent, but that includes $2.5 million in restructuring costs. Net income plunged 27.4% to $26.7 million, which the company attributed to the result of lower EBITDA and increased depreciation and amortization expense.
"Our third-quarter results reflect an organization in transition as we turnaround and exit Allstream, while launching the transformation of MTS into a customer-first communications services provider," added Forbes. "That said, the 48% increase in free cash flow in the third quarter is illustrative of the opportunities we see for continued value creation."
