CALGARY – “Solid” subscriber growth, including a “record” quarterly gain in digital subs, helped Shaw recognize a 10% jump in consolidated service revenue for its second quarter, compared to the same period last year.
Consolidated service revenue for the second quarter ended February 28, 2009 was $839 million, while service operating income of $381 million before amortization was a 9% improvement over the same time last year.
The company also reported funds flow from operations increased to $335 million compared to $304 million in the same year-over-year period. Free cash flow for the quarter was $138 million, flat compared to last year, while net income of $156 million was down compared to $299 million for the same period last year.
"We continue to thrive in this dynamic, highly competitive and rapidly evolving marketplace by focusing on our relationship with our customer and leveraging our infrastructure with new and improved product offerings,” said CEO and vice chair Jim Shaw, in a statement.
For the quarter, Shaw’s basic cable subscribers increased 4,273 to 2.27 million, while digital grew by 106,489 subscribers to bring its total to 1.08 million, a 47.3% penetration of basic.
Shaw’s Internet customers grew by 26,130 to 1.62 million for the quarter, resulting in an Internet penetration rate of basic of 71.5%. Digital phone lines grew by 50,848 to 719,376.
Star Choice added 3,657 new customers during the quarter to bring its total to 896,633. After adding new HD services to its lineup, the DTH provider reported having almost 300,000 HD subscribers.
Service revenue in the Cable division was up almost 12% for the quarter and year-to-date periods to $650 million and $1.28 billion. According to the company press release, the improvement was primarily driven by customer growth and rate increases. Service operating income before amortization improved 10% to $313 million for the quarter, and was up 11% on a year-to-date basis to $616 million.
Service revenue in the Satellite division was $190 million and $378 million for the three and six month periods respectively, up 5% over the comparable periods last year, due primarily to rate increases and customer growth. Service operating income before amortization for the quarter increased 4% to $68 million, and the year-to-date was up 6% to $133 million.
Looking ahead, Shaw expressed confidence, despite the slowing economy.
"We believe the resilience of our business and the strength of our strategy should continue to produce solid operational and financial results even in the face of these weaker economic conditions. Customers will continue to demand exceptional service, value and reliability and we will deliver. We remain on track to achieve our financial guidance for the year, which includes generating free cash flow of at least $500 million," he continued.
