CALGARY – Cable, Internet and satellite giant Shaw Communications today announced that its consolidated service revenue for the three and twelve month periods ended August 31, 2008 was $806 million and $3.10 billion, respectively, improved 13% and 12% over the same periods last year.
Total service operating income before amortization of $370 million and $1.41 billion was up 13% and 14%, respectively, over the comparable periods. Funds flow from operations increased to $321 million and $1.22 billion for the quarter and year, respectively, compared to $273 million and $1.03 billion in the same periods last year, said the company.
During the quarter basic cable subscribers increased 4,122 to 2,248,120, digital and Internet customers grew by 23,020 to 906,320 and 24,785 to 1,565,962, respectively, and digital phone lines grew by 61,999 to 611,931. DTH customers increased 1,736 to 892,528.
But despite the positive showing across the board, the company is still unsure about getting into the wireless market, despite spending almost $200 million for advance wireless spectrum.
During Q4 Shaw bought 20 megahertz of spectrum across most of its cable footprint for a cost of $190 million. However, "we continue to review our wireless strategy and believe our entry in this new market should be measured and prudent in light of the developing competitive wireless market dynamics. As a result, we do not currently anticipate making material investments in wireless during 2009,” said company CEO Jim Shaw.
“Throughout fiscal 2008 we delivered solid subscriber growth in all products. Digital phone had record customer gains almost every quarter… We continue to maintain one of the strongest broadband businesses in North America with 70% penetration of basic customers. Digital TV had a record year adding over 140,000 customers which represents an increase of over 55% compared to last year,” he added.
"We delivered strong financial results and improved our financial metrics, including our industry leading operating margin. Annual consolidated revenues were up 12% and consolidated service operating income increased almost 14%. Growth in free cash flow of approximately $100 million to $453 million was achieved in conjunction with continued significant capital investment required to facilitate growth and maintain a leading network capable of providing the next generation of services. We make prudent investments to meet our current and longer term strategic goals while preserving our ability to return cash to our shareholders. Dividends paid to shareholders in fiscal 2008 increased 52% to over $300 million and we repurchased $100 million of shares.”
Service revenue in the cable division was up 14% for each of the three and twelve month periods to $620 million and $2.38 billion. The improvement was primarily driven by customer growth and rate increases. Service operating income before amortization improved 13% to $302 million for the quarter and was up almost 16% on a year-to-date basis to $1.15 billion.
Service revenue in the satellite division (which the CEO indicated during the conference call today with financial analysts will soon have a new look) was $185 million and $729 million for the three and twelve month periods, up 7% and 5%, respectively, over the comparable periods last year. The improvement was primarily due to rate increases and customer growth. Service operating income before amortization for the quarter and year were up 13% and 5%, respectively, to $67 million and $255 million.
"Looking forward, we expect continued growth in fiscal 2009. Our preliminary view calls for service operating income before amortization in the cable division to increase approximately 10% and we anticipate modest growth in the satellite division. We plan to invest in capital expenditures to address business growth and drive continued improvements in competitiveness. We expect to generate free cash flow of at least $500 million and will manage the business to ensure we have flexibility to respond strategically to market conditions and opportunities."
