CALGARY – The demise of streaming service shomi weighed heavily on first quarter profits at Shaw Communications, which saw net income plunge by almost 60%.
For the three month period ended November 30, 2016, Shaw posted net income of $89 million, well below the $218 million reported in Q1 2016, due to a $107 million charge from the wind down of shomi, its joint venture with Rogers Communications. Net income this quarter also reflects a decrease in income from discontinued operations, net of tax, in the amount of $80 million due to the sale of its Corus Media division last year, which was offset partially by the equity income of $27 million in the quarter from its investment in Corus.
Consolidated revenue from continuing operations for the quarter of $1.3 billion increased by 14.9% from $1.1 billion year-over-year, while operating income before restructuring costs and amortization for the quarter of $539 million improved 6.1% over the comparable period. Excluding the results of the Wireless division, acquired on March 1, 2016, revenue for the quarter from the combined Consumer, Business Network Services and Business Infrastructure Services divisions was up 2.8% and operating income before restructuring costs and amortization for the quarter remained flat over the comparable period.
"We've entered fiscal 2017 with momentum and on track to deliver on our strategic initiatives”, said CEO Brad Shaw, calling the launch of BlueSky TV and Freedom Mobile's LTE-Advanced network as “key milestones”. “Our solid first quarter results reflect the broadband advantage we've created and our disciplined approach to long-term and sustainable growth."
The company said that consumer revenue generating units (RGUs) declined by 29,696, a “meaningful improvement” over the 43,750 loss in the first quarter of fiscal 2016, driven by a reduction in cable video and phone RGU losses in addition to strong Internet RGU net gains of 16,669 reflecting a full quarter impact of its WideOpen Internet 150 offering launched in August 2016. The decline in consumer RGUs was also largely impacted by the anticipated seasonal disconnections of satellite video subscribers in the amount of 15,704 RGUs.
Consumer division subscribers for the quarter were 1,657,913 cable video subscribers (down 18,029 year-over-year), 1,804,606 Internet customers (up 9,433) and 938,918 digital phone lines (down 22,227). Satellite customers totalled 774,905, a decrease of 12,927 year-over-year.
Business Network Services, which includes cable, satellite, Internet and phone, lost 1,090 subscribers to end the first quarter with a total of 572,606.
Its wireless division ended the period with 681,335 postpaid customers and 371,423 prepaid customers, for a total of 1,052,758.
"We are using our wireline broadband advantage to support WideOpen Internet 150 with the majority of new Internet customers opting for our two-year value plan, underlining the value we are providing with much faster speeds at affordable prices across 95% of our footprint," continued CEO Shaw. "We continue to enhance our wireline network and are on track to complete our DOCSIS 3.1 upgrade by the end of fiscal 2017."
