CALGARY – Despite an increase in revenue, Shaw Communications saw first quarter profits drop by 4%.
For the three month period ended November 30, 2015, Shaw posted net income of $218 million, down from $227 in the prior year, primarily from higher income taxes and amortization, partially offset by an improvement in operating income before restructuring costs and amortization.
Revenue for the quarter of $1.42 billion was up 2.2% from $1.39 billion year-over-over, reflecting growth in its Consumer, Business Network Services and Business Infrastructure Services divisions. The improvement is primarily attributed to customer growth in both the Business Network Services and Business Infrastructure Services divisions and Consumer division rate increases introduced in 2015, offset partially by decreased revenue in its Media division.
Operating income before restructuring costs and amortization for the quarter of $626 million improved 3.3% over the comparable period.
Free cash flow dropped 10.4% from $193 million last year to $173 million, primarily due to timing of planned capital expenditures for the first quarter being higher than for the comparable period, partially offset by higher operating income before restructuring costs and amortization.
Shaw said that its Consumer and Business Network Services divisions, excluding named and wholesale customers, had 5.9 million total revenue generating units (RGUs) at quarter end. RGUs declined by 44,840, driven primarily by Consumer phone losses of 22,227, satellite video losses of 12,927 and cable video losses of 18,029, offset by Internet gains of 9,433.
Consumer division subscribers for the quarter were 1,746,494 cable video subscribers (down 18,029), 1,781,726 Internet customers (up 9,433) and 1,005,039 digital phone lines (down 22,227). Satellite customers totalled 799,061, a decrease of 12,927 year-over-year.
“Up against a difficult economic backdrop in western Canada, we are pleased with our first quarter results”, said CEO Brad Shaw, in a statement. “Our financial performance strengthens our solid base and focus on excellent products and services for our customers. Our recently announced acquisition of Wind Mobile and sale of Shaw Media build on this foundation to firmly position Shaw as a leading pure-play connectivity provider with a focus on delivering consumer and business broadband communications supported by our best-in-class wireline, WiFi and wireless infrastructure.”
