CALGARY – Shaw Communication’s move away from media and towards wireless appears to be paying off, as the company saw third quarter profits triple.
For the three month period ended May 31, 2016, Shaw posted net income of $704 million, up 236.8% from $209 million from the same period last year, which it said reflects higher operating income before restructuring costs and amortization with the addition of its wireless results, a gain on the sale of its media division which were offset in part by an equity loss from its investment in Corus Entertainment and certain non-recurring items.
Revenue for the quarter was $1.28 billion, a 13% increase from $1.14 billion year-over-year, while operating income before restructuring costs and amortization1 for the quarter of $555 million increased 5.3% from $527 million in Q3 2015.
“We continue to make significant progress in our journey to becoming an enhanced connectivity provider. Our third quarter financial and operating results include a full quarter contribution from Wind Mobile, our new wireless division, and we are pleased to confirm that during the quarter we surpassed over 1 million wireless subscribers”, said CEO Brad Shaw, in a statement. “We also completed the first critical step in our wireless network upgrade. All 3G equipment in western Canada has now been replaced with Nokia equipment which enables us to increase speeds and throughput as well as put to use an additional 10MHz of AWS-1 spectrum to significantly enhance performance. Our path towards an LTE network is currently underway and we expect to have this completed by the end of fiscal 2017.”
The company said that its revenue generating units (RGUs) continue to be affected by external factors including the economy, competition, seasonality and the wildfires that significantly affected the Fort McMurray area. Shaw said that the fires in the Fort McMurray area caused a 5,400 RGU reduction in the quarter; however, many of those customers reconnected following the lift of the mandatory evacuation order. Shaw’s network did not incur any significant damage or service interruptions due to these fires.
Consumer division subscribers for the quarter were 1,693,230 cable video subscribers (down 27,482), 1,777,301 Internet customers (down 8,760) and 975,705 digital phone lines (down 14,861). Satellite customers totalled 796,906, an increase of 3,847 year-over-year.
Business Network Services, which includes cable, satellite, Internet and phone, gained 4,307 subscribers to end the third quarter with a total of 567,821.
Its new wireless division ended the period with 639,997 postpaid customers and 363,472 prepaid customers, for a total of 1,003,469.
CEO Shaw said that by the end of fiscal 2017, the X1 set-top box will be available to all customers, it will have completed the wireless LTE upgrade in its existing markets and DOCSIS 3.1 implemented throughout the wireline network, enabling Internet speeds of 1GB and more.
“We have an exceptional management team in place and as we look ahead over the next 18 months, we are confident in the execution of our strategic plan”, he added. “This is a period of investment for our future and we continue to implement the building blocks required to complete a number of these strategic initiatives by the end of fiscal 2017.”
