CALGARY – Shaw Communications bucked the trend among its cable brethren somewhat by growing its number of digital subscribers.
Shaw added almost 40,000 digital cable customers in the first quarter of fiscal 2008, ended November 30, 2007, a 56% increase over last year’s Q1. As reported this week by Cartt.ca, both Rogers Cable and Cogeco Cable saw their digital growth slow over the same or similar time frame.
However, at just 36% digital penetration as compared to basic subs, Shaw has a longer way to go in terms of digital growth when compared to Rogers (59% penetration) and Cogeco (48%), for example.
Also during the quarter, Shaw basic cable subscribers increased by 8,138 to 2,234,979, and Internet customers grew by 34,719 to 1,486,475, basically flat as compared to Q1 2007.
Local phone lines were up 50,339 to 435,696, a rate of growth that’s 32% higher than the same time frame last year. Star Choice, as it has for many quarters, saw limited growth, adding 1,544 customers to 881,129.
Free cash flow for the quarter was $90 million compared to $76 million for the same period last year, an improvement of $14 million. The growth in free cash flow was achieved through higher service operating income before amortization and after increased capital investment of $22 million, says the company’s press release.
"We are off to a solid start in 2008" said Jim Shaw, CEO. "Our first quarter results put us firmly on track to deliver on our annual operational and financial objectives. Quarterly subscriber growth was one of the strongest we have had for digital phone and digital, with other product lines showing continued steady growth."
Net income of $112 million or $0.26 per share for the quarter ended November 30, 2007 compared to $81 million or $0.19 per share for the same quarter last year. The current period included a net duty recovery of approximately $22 million before income taxes related to the importation of satellite receivers. Excluding the non-operating items, net income for the three month period ended November 30, 2007 would have been $96 million compared to $81 million last year.
Service revenue in the Cable division was up 13% for the three month period to $565 million compared to $499 million in the same period last year. The improvement was primarily driven by customer growth and rate increases. Service operating income before amortization increased almost 15% to $273 million for the quarter.
Satellite division service revenue of $178 million, increased 4% over the same period last year. The improvement was primarily due to rate increases and customer growth. Service operating income before amortization for the quarter was $60 million compared to $62 million last year.
"We continue to gain efficiencies with our digital phone product which is a significant contributor to our growth in revenue and service operating income before amortization" said the CEO. "We are now able to offer the triple play of voice, video and data to approximately 85% of our homes passed. Ongoing value enhancements to our products and our focus on the customer allow us to continue to differentiate ourselves from our competitors and generate positive results."
Shaw added that the company’s point of view on adding the fourth arm of the quadruple play has not changed. "We are currently reviewing the advanced wireless spectrum auction rules and have no comment with respect to our intentions at this time,” said Shaw,
