WINNIPEG – Third quarter revenues fell 3.7% at MTS Allstream, which the company attributed to legacy declines and planned reductions at Allstream.
These declines were partly offset by revenue growth from strategic lines of business (wireless, broadband and converged IP), which increased by 3.8% over Q3 2012, on the strength of higher ARPU and subscriber growth across these lines of business.
For the period ended September 30, 2013, consolidated revenues were $408.4 million, down from $424.3 million from the same quarter in 2012. Consolidated EBITDA dipped 2.1% to $142.7 million from $145.7 year-over-year, and annualized cost reductions of $59.0 million were achieved.
The company said that its third-quarter financial performance reflects strategic focus on increasing cash flows by leveraging investments in MTS's wireless and broadband networks in Manitoba, and Allstream's Internet protocol fibre network nationally.
Quarterly highlights include:
MTS
– Wireless revenues up 4.0%, or 7.6% excluding wireless wholesale;
– Wireless subscriber data revenues up 18.7%;
– Internet revenues up 9.4%;
– IPTV revenues up 3.1%;
– ARPU growth in wireless and Internet.
Allstream
– EBITDA up 17.5% to $30.9 million, excluding transaction and restructuring costs;
– Increased gross margin percentage to 63.2%;
– Converged IP revenues down 0.7%, but up 4.4% excluding impact of Government of Ontario disconnects;
– Reduced operations expense by $10.1 million, or 12.2%.
CEO Pierre Blouin noted that MTS continues to offset anticipated revenue declines in wireless wholesale and legacy lines of business with growth in revenues from “strategic services”. While expressing disappointment with the government's decision to reject the sale of Allstream last month, he said that he was “particularly encouraged…. (with) the validation we received through the strategic review process of Allstream's value and potential”.
"The plan for Allstream is to continue executing the strategy that delivered 10 consecutive quarters of year-over-year EBITDA growth prior to the transaction announcement”, Blouin said in a statement. “That means we will continue to focus on adding more on-net IP customers, expanding our share of connected buildings in major urban centres across Canada, delivering innovative products and services to our customers, and reducing our cost structure to improve financial performance.”
The Board of Directors declared $0.425 per share Q4 2013 cash dividend, payable on January 15, 2014 to shareholders of record at the close of business on December 16, 2013.
