HALIFAX – "I am very pleased with our revenue growth of 2.4% and EBITDA growth of 1.5% that we have achieved in the second quarter," said Stephen Wetmore, outgoing president and CEO of the Eastern and rural Ontario and Quebec telco in a press release on Tuesday. "The success of our productivity initiatives has enabled us to maintain our year-to-date EBITDA margin consistent with that of last year, and will continue to help us going forward."
In the second quarter of 2008, ended June 30th, operating revenue increased $19 million (2.4%) compared to the same period a year ago with strong growth in Information Technology (IT) and Internet revenues.
Internet revenue grew by $9.4 million (10.9%) in Q2 compared to the same period in 2007, with high-speed Internet subscribers growing 13.1% from a year earlier.
IT revenue increased by $23.1 million (36.1%) in the quarter compared to the same period last year, with increases in services revenue and equipment sales of 23.6% and 45.6% respectively.
Losses continue in local service and long distance as revenue there declined by $8.5 million (2.4%) and $5.7 million (4.8%), respectively, in the quarter of 2008. Network access services (NAS) were 3.3% lower than a year ago with net NAS declines of 20,669 in the quarter.
EBITDA increased $5.4 million (1.5%) in the second quarter of 2008 compared to the second quarter of 2007, with the benefits of cost containment and productivity programs and lower provincial capital taxes offsetting the effects of lower revenue margins.
Capital expenditures in the second quarter were $127.5 million, down $15.9 million (11.1%) from the same quarter a year earlier, as 2007 included higher spending for an accelerated fibre-to-the-node (FTTN) build out.
During the second quarter, Bell Aliant determined that it will eliminate the wholesale mobility products business of Atlantic Mobility Products Limited Partnership (AMP), a wholly-owned Bell Aliant subsidiary and has reclassified AMP as discontinued operations for accounting purposes.
Also on Tuesday, Bell Aliant and CAE announced that they have entered into an asset purchase agreement for CAE to acquire Bell Aliant’s Defense, Security and Aerospace information technology business unit, which currently operates under the xwave brand, for $15.1 million. These events remove the revenue streams from these assets for the purposes of Bell Aliant’s 2008 operating revenue guidance, therefore necessitating an adjustment to this guidance. Previously issued 2008 guidance ranges for capital intensity and distributable cash are not affected.
