TORONTO – "We are pleased with our first quarter financial performance as Bell Aliant," said Stephen Wetmore, president and CEO. "In addition to accomplishing a seamless transition for our customers, we had pro forma revenue growth of 1.8% this quarter, and 1.3% revenue growth for the first nine months of 2006 compared to the same periods in 2005, led by high-speed Internet revenue growth of 18.8% in the quarter over the same quarter last year. This is well within our expectations for 2006."
The telco which serves all of the Eastern provinces plus large swaths of rural Ontario and Quebec reported net earnings of $78.6 million and declared cash distributions of $77.9 million or $0.6279 per unit to unitholders, in its first quarter of operations. This represents an annualized distribution of $2.74 per unit.
For the quarter ended September 30, 2006, Bell Aliant Holdings LP reported operating revenues of $817.6 million, operating income of $193.0 million and available distributable cash of $185.9 million. Consolidated cash distributions declared by Bell Aliant were $141.5 million, consisting of $78.6 million to the Fund and $62.9 million to BCE and Bell Canada.
Growth, said senior vice-president marketing Heather Tulk, will come from data services and the company’s TV service. Expanding its PC purchase program (where customers can pay a monthly fee for a PC or laptop into Ontario and Quebec and into the small busines market has paid off, as Internet subs have grown by over 26% as compared to a year ago, she told financial analysts on a conference call Thursday.
As for Aliant TV, she did not disclose any customer figures but did say: "Subscriber penetration within footprint is performing ahead of forecast." The footprint for the digital TV service has grown in Halifax and is also available in Saint John and Moncton N.B. as well as St. John’s.
These new lines of revenue have to offset declines in local lines (down 1.2%) and long distance revenue ("which we kept to a single-digit loss [4.7%]," said Tulk).
Local revenues declined by 0.9% to $367.6 million in the quarter, driven by a decline in network access services (NAS) of 1.2%, adds the company’s release. Increased local service competition, a reduction in second lines as dial-up Internet customers convert to high-speed and migration to wireless and voice over Internet protocol (VOIP) technologies account for the declining NAS. NAS decline was partially offset by selected rate increases and increasing penetration of enhanced features in our customer base.
Long distance revenues were $129.2 million in the quarter, a decline of $6.4 million or 4.7% compared to the same period a year ago. Reductions in residential average revenue per minute reflect increased penetration of our unlimited long distance packages while business long distance revenue per minute increased due to increased network access charge rates. Overall long distance minutes declined by 2.5% in the quarter compared to the same period last year.
Data and Internet revenue was $167.2 million, an increase of 9.6% in the quarter compared to the same period last year, led by high- speed Internet revenue growth of 18.8% and customer growth of 26.4% from a year ago. Our Internet business continues to demonstrate strong growth driven by service area expansion, programs which make it easier for customers to get online, such as the PC purchase program, and success with our new home-based business and small business campaigns.
Information technology revenue from our xwave division was $60.7 million, an increase of 12.4% over the same quarter last year and revenues from our other subsidiaries added another $3.4 million to quarter over quarter growth.
Capital expenditures in the quarter were $132.2 million, bringing year- to-date capital intensity(4) to 15.4%, in line with management targets for 2006.
