SAINT JOHN – As it prepares to become the base of a big new rural phone company income trust, revenues at eastern telco Aliant climbed 3.9% and operating income was up 11.1% in the first quarter, ended March 31.
"(T)he company’s productivity initiatives contained operating expense growth," according to today’s press release. A non-cash loss for accounting purposes regarding hedging instruments resulted in an $8.3 million after-tax charge in the quarter, reducing net income to $40.2 million, a 7.8% decrease from the first quarter of 2005. Cash generated from operations was $99.7 million for the first quarter of 2006.
"Our focus on growth and transformation allowed us to post solid revenue gains while realizing significant productivity savings throughout the organization. The combination of the two, in turn, allowed us to post a strong, double digit increase in operating income for the quarter," said Jay Forbes, Aliant’s outgoing president and CEO, in the press release. "Further, the strength of the underlying cash flows in the Aliant wireline operations bodes well for creating steady distributable cash flow for the new Bell Aliant Regional Communications Income Fund."
Revenue came in at $544.9 million in the quarter and operating income was $96.3 million.
Internet revenues for the quarter grew 20.7%, which were driven by year-over-year high-speed Internet customer growth of 39.7% (to 353,300 customers) and a steady migration of dial-up customers to high-speed service. Wireless revenues for the quarter grew 14.3% year-over-year, as the customer base grew 12.9% (to 732,343 customers) and net activations were up 83.2% to 16,850 from the same quarter last year. Total revenues from the information technology segment were flat year over year reflecting a decline in internally generated revenues and 7.8 per cent growth in external revenues.
Local wireline customer losses continue for all telcos and Aliant was no exception. It lost over 24,000 customers from the end of Q1 2005 to the end of Q1 ’06, saying in its MD&A, "(l)ocal revenue continued to decline in the first quarter of 2006, at a pace similar to that experienced during the same period in 2005, due to recent service area expansion by our competition, technology substitution and regulatory constraints. Revenue for the first quarter of 2006 is down 2.8 per cent over the same period in the prior year.
As for Aliant’s nascent IPTV service, the company was light on details, given its newness and lack of critical mass, saying only: " We are advancing on our strategy to roll out our IP-based television service, Aliant TV. Customer adoption and satisfaction rates continue to be positive. Aliant TV is available in select areas of Halifax. We plan to roll out our fibre-to-the-node network, which enables Aliant TV, throughout Halifax and into other major urban centres in our region."
The company will not be hosting a quarterly conference call as it plans to meet with financial analysts in person prior to the company AGM on May 17th.
