WINNIPEG – MTS announced Tuesday that it had achieved its 2007 revenue guidance, hit the high end of predicted EBITDA and free cash flow guidance, and exceeded its earnings per share guidance for the fiscal year 2007, ended December 31.
In 2007, growth services (wireless, Internet, TV, unified communications) revenues increased by 12.6%, and EPS from continuing operations increased by 15.6%.
"These results underline how 2007 marked a turning point for MTS. With the successful execution of the strategy we developed in 2006, we have proven that we can meet the competitive challenges of our industry and we are now looking at the future with a positive view of a growing business," said Pierre Blouin, CEO, in the press release. "Results are in line with our business plan at all levels as we continue to capitalize on strong customer relationships and our ability to bring innovative new services to market."
EBITDA from continuing operations in the fourth quarter was $154.8 million, and for the year, increased by 0.8%, to $655.1 million as compared to a year ago. Higher year-end EBITDA reflects strong performance in growth services revenues and lower expenses resulting from successful cost reduction initiatives, says the release. The company has let hundreds of employees go over the past couple of years. “Overall, these solid results contributed to free cash flow from continuing operations of $10.1 million and $258.5 million for the quarter and full year, respectively,” adds the release.
Revenues from continuing operations increased by 2.1% to $489.2 million in the fourth quarter of 2007 as compared to the same period last year as a result of stronger performance from both the Enterprise Solutions and Consumer Markets divisions. Full year revenue from continuing operations results were down 0.5% to $1.906 billion as compared to 2006. These results reflect the company’s business strategy to increase growth services revenues in the Enterprise Solutions division and the Consumer Markets division to offset declines in its legacy services, and the loss of business revenue as Rogers Communications Inc. ("Rogers") and AT&T Corp. ("AT&T") continued to migrate their communications traffic to their own networks. If the revenues from Rogers and AT&T were excluded, fourth quarter and full year revenue from continuing operations would be positive by 4.8% and 2.1%, respectively.
Growth services revenues, which include wireless, high-speed Internet, digital television, converged Internet protocol ("IP") and unified communications services, were up by 15.0% to $204.7 million in the fourth quarter of 2007, and by 12.6% to $759.5 million for the year. Growth services contributed approximately 42% of total revenue in the fourth quarter of 2007 and 40% for the year, which is well ahead of the 37% and 35% contributions, respectively, for the same periods of 2006.
For the full year, the 2007 cost reduction program has achieved $41.6 million in annualized savings, which is in line with the company’s objective to achieve annualized expense savings of $40 million to $50 million.
