WINNIPEG – While revenue was strong, Manitoba Telecom Services posted big drops in earnings and income, however, the numbers were expected.
The Manitoba division is performing well and the integration of Allstream has brought in revenue, but competitive challenges in that national division has placed pressure on the MTS bottom line.
It was new CEO Pierre Blouin’s first investors’ conference call helming the Winnipeg-based company. "We’ve got a tremendous regional franchise, national capabilities representing significant potential, and an aggressive program underway… to lower our costs, improve our cash flow and position our company for long-term success,” said Blouin in a release. “As incoming CEO, I also have initiated a comprehensive review of our entire business. The objective is to ensure our direction and resources are focused appropriately – in support of continuing our company’s tradition of creating shareholder value for the long-term. In addition, based on our analysis of capital investments, working capital, cash expenses, and dividend requirements, we believe fulfilling our 2006 cash flow requirements is manageable."
The company also announced that “after many years of exceptional service,” Cheryl Barker, president MTS Manitoba, has decided to retire, effective February 3, 2006. "Cheryl played a major role in advancing the business and contributing to its success," said Blouin. "On behalf of the board of directors, management and employees, I would like to thank Cheryl for her outstanding dedication and service, and wish her the very best in her future endeavours."
Kelvin Shepherd, currently COO, MTS Communications and chief technology officer of MTS Allstream Inc., has been appointed president of MTS Manitoba.
For the three months ended December 31, 2005, revenues were $503.7 million, bringing total revenues for the year to $2.017 billion, which is up significantly from 2004 annual revenues of $1.525 billion.
"Our 2005 results from continuing operations were in line with our revised targets for the year," said Wayne Demkey, executive vice-president and CFO. "Consolidated revenues exceeded $2 billion, EBITDA was $672 million, EPS was $2.74, and free cash flow was $265.1 million. We have exceeded our target for the first phase of our integration project achieving annualized expense savings of $47 million, which positions us well to move forward with the execution of our Transition Phase II cost reduction program."
However, EBITDA in the fourth quarter was $121.8 million, a 30% drop compared to the fourth quarter of 2004 and operating income slid 57% to $39.9 million.
On the MTS TV side, the customer count was 51,500 at the end of 2005 while wireless customers came in at 317,555 customers, resulting in an increase of 11.1% or 31,759 customers over the previous year. The net customer additions of 12,078 during the fourth quarter represent the strongest increase in wireless customers since the fourth quarter of 2001.
