CALGARY — Shaw Communications reported Monday a 2.1% increase in consolidated revenue in the first quarter of its 2020 fiscal year, bolstered in part by a strong 18.1% year-over-year increase in its wireless service revenue.
For the quarter ended November 30, 2019, Shaw’s consolidated revenue totalled $1.38 billion, compared to $1.35 billion for the same quarter in 2019. The company’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) improved 8.1% year-over-year to $588 million.
Wireless service revenue for the three-month period increased 18.1% to $196 million over the comparable period in fiscal 2019. Shaw attributed the strong performance of its wireless service business to Freedom Mobile’s continued growth in its customer base, including approximately 67,000 postpaid net additions in the first quarter of 2020. Its wireless subscribers now total more than 1.7 million customers.
In addition, Freedom Mobile achieved year-over-year ABPU and ARPU growth of 4.5% and 1%, respectively. Postpaid churn increased marginally in the quarter to 1.5% compared to a year ago as Freedom Mobile began the renewal of its initial iPhone cohort from the Christmas period in 2017, a positive outcome given the intensity of competitive offers heading into the holiday shopping period, Shaw said. Wireless network investments to improve the customer experience continue to be a priority, Shaw said, with deployment of 700 MHz spectrum now substantially complete in Western Canada and scheduled for completion in the remaining markets in Ontario throughout fiscal 2020.
In Shaw’s wireline segment, consumer Internet net additions grew by approximately 5,600. With the launch of BlueCurve Total, which bundles BlueCurve Internet with BlueCurve TV, Shaw said it delivered its best consumer video subscriber result in more than two years, where video subscriber numbers declined more slowly during the quarter.
The roll-out of IPTV across its cable footprint is 76% complete, added the company, and the number of customers electing to self-install increased to more than 48% in the quarter, supporting its digital transformation initiatives and the lower cost to serve model. Shaw said its Business segment continues to attract customers in the small, medium and enterprise market, delivering top-line revenue growth of 3.6% year-over-year to $143 million, or approximately 5% growth excluding the effect of prior year revenue from the Calgary1 data centre sold on August 1, 2019.
Shaw’s capital expenditures in the first quarter of 2020 totalled $260 million compared to $271 million a year ago. Wireline capital spending was comparable to the previous year, while wireless spending decreased by approximately $11 million year-over-year due to timing of expenditures and higher costs associated with the deployment of 700 MHz spectrum and expansion of the wireless network into new markets in the previous year, Shaw said.
Shaw reported free cash flow of $183 million for Q1 2020 compared to $163 million in the prior year. The increase was largely due to lower capital expenditures and cash taxes, the company said.
Finally, net income for the first quarter of fiscal 2020 was $162 million compared to $186 million in the first quarter of fiscal 2019. The decrease of $24 million was primarily due to $23 million in equity income recorded in the first quarter of fiscal 2019 attributable to Shaw’s investment in Corus Entertainment. On May 31, 2019, Shaw disposed of its entire equity investment in Corus.
“We continue to demonstrate consistent execution across our business units and remain focused on our growth segments including wireless, business and broadband,” said Brad Shaw, CEO. “As the competitive landscape in wireless continues to intensify and evolve, our positioning in the market remains strong. Freedom Mobile’s reputation of providing high quality and affordable wireless services, not just during the highly competitive holiday period, but every day, resonates well with customers and through the introduction of Freedom Home Internet, we have reinforced our dual brand strategy that enables us to effectively segment the broadband market.”
The full details of Shaw’s Q1 2020 fiscal results can be found here.
