CALGARY – Despite adding fewer wireless customers than this time last year, Shaw Communications saw second quarter profits return to the black.
For the three month period ended February 28, 2019, the company posted net income of $155 million up from the $175 million net loss posted in the same period last year. Consolidated revenue dipped 1.0% to $1.32 billion year-over-year, and operating income before restructuring costs and amortization increased 13.7% to $549 million due to continued growth in its Wireline and Wireless segments.
Shaw said Tuesday that it added approximately 47,800 net Wireless revenue generating units (RGUs) in the quarter, consisting of 64,700 postpaid additions and 16,900 prepaid losses. The continued increase in the postpaid subscriber base reflects customer demand for premium smartphones combined with affordable device pricing and packaging options. The decrease in the prepaid customer base reflects migrations to higher value postpaid plans as well as an increasingly competitive environment targeting the prepaid segment.
Wireless results include postpaid net subscriber additions of approximately 65,000, bringing the total Freedom Mobile customer base to over 1.5 million at the end of the second quarter. Shaw added that Freedom Mobile will continue to launch in new markets throughout fiscal 2019, primarily in Western Canada.
Wireless service revenue for the three-month period increased by 26% to $169 million over the comparable period in fiscal 2018 due to the growing penetration of Big Gig data plans. Wireless equipment revenue dropped by 40% to $78 million as the comparable period included record subscriber performance, the majority of whom purchased a device through Freedom Mobile.
Wireline RGUs declined by approximately 44,600 in the quarter compared to a loss of approximately 25,600 in the second quarter of fiscal 2018. The current quarter includes growth in Consumer Internet RGUs of approximately 11,100 whereas the mature products within the Consumer division, including Video, Satellite and Phone declined in aggregate by 59,500 RGUs.
“We continue to make progress on our strategic priorities and journey to a modern Shaw”, said CEO Brad Shaw, in a statement. “Second quarter results include stable Wireline performance, improved broadband execution and solid subscriber growth in our Wireless business. While we still have lots of work ahead of us, our second quarter and year-to-date results reflect improvement on all these initiatives, combined with a meaningful reduction in our cost structure that resulted in strong margin performance in the quarter."
Shaw’s Q2 financial report is available here.
