VANCOUVER – A surge in new wireless, internet and TV customers at Telus helped to drive up third quarter profits by 4.2%, the company said Thursday.
For the period ended September 30, 2017, consolidated operating revenue rose 4.0% to $3.4 billion from the same quarter a year ago, reflecting an increase in revenue from its growth services, including wireless and wireline data revenues.
Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased by 5.9% to $1.2 billion, while adjusted EBITDA was up 4.4% due to higher revenue growth and cost savings from ongoing operational efficiency and effectiveness initiatives.
Net income of $370 million increased by 4.2% from $355 million last year, while adjusted net income rose 2.1% to $391 million, up from $383 million in Q3 2016.
Free cash flow of $215 million in the period increased by $117 million year-over-year due primarily to lower cash taxes paid.
In wireless, network revenue increased by 6.8% to $1.8 billion, reflecting higher ARPU as customers move to higher-rate plans, including Premium Plus, and increased data consumption, continued postpaid subscriber growth, including smartphone adoption and subscribers acquired from MTS, and higher roaming revenues.
In wireline, data services and equipment revenue increased by 4.1% to $1.1 billion, reflecting increased Internet and enhanced data service revenues from continued high-speed Internet subscriber growth and higher revenue per customer, higher Telus Health revenues driven by organic growth through additional professional services and support revenue, and through acquisitions, growth in business process outsourcing revenues inclusive of foreign exchange impacts on foreign operations, and an increase in Telus TV revenues from subscriber growth.
In the quarter, Telus recorded 152,000 new wireless, high-speed Internet and Telus TV customers, up 44,000 over the same quarter a year ago. The higher net additions included 124,000 wireless customers, including 115,000 postpaid net additions, 19,000 high-speed Internet subscribers, and 9,000 Telus TV customers. Telus’ total wireless subscriber base of 8.8 million is up 3.7% from a year ago, reflecting a 5.4% increase in its postpaid subscriber base to 7.9 million. High-speed Internet connections increased 5.6% to 1.7 million over the last twelve months, while the Telus TV subscriber base of 1.1 million is higher by 3.9%.
Telus added that its monthly wireless postpaid churn rate declined by 8 basis points year-over-year to 0.86%, reflecting its focus on executing customers first initiatives and retention programs.
"Telus reported strong third quarter results as we continue to drive high quality wireless, Internet and TV customer additions, anchored by solid-revenue and EBITDA growth and industry-leading performance for customer service and loyalty," said president and CEO Darren Entwistle, in a statement. "Further supporting these results is the Telus team's consistent execution of our longstanding broadband growth strategy, underpinned by the long-term investments we are making in our generational fibre build which is resulting in Telus networks being consistently recognized as among the fastest and most reliable in the world. In addition to benefitting our customers and the Canadian economy, our capital investments have been instrumental in the success of our wireless and wireline growth strategy, which has now delivered 28 consecutive quarters of wireless ARPU growth and 20 successive quarters of wireline EBITDA growth."
The company also raised its dividend for the second time this year to 50.5 cents per share.
The full details of Telus’ Q3 2017 financial results are available here.
