CALGARY – Shaw Communications second quarter revenue came in at $1.34 billion and at $2.73 billion for the first half of the fiscal year, which are increases of 5% and 3%, respectively, the company announced this morning.
Total operating income before restructuring costs and amortization of $557 million improved 5% over the comparable quarter while the year-to-date amount of $1.16 billion improved 2% over the prior year. The company’s Q2 and first half ended February 28.
Chief Executive Officer, Brad Shaw said, "The positive operating momentum continues across our businesses. We are seeing the financial and operational benefits of the restructuring we started last year as part of our multi-year Focus to Deliver initiative through a more focused and disciplined approach in executing on components of our strategy, enhancing our efficiency and growth potential while better serving the needs of customers and viewers."
However, net income was down 24% to $168 million in the quarter and down 15% in the first half to $395 million, compared to the same periods last fiscal year. The current periods included restructuring costs and higher amortization and net other costs and revenue, partially offset by improved operating income before restructuring costs and amortization and lower income taxes, reads the press release. Also “in the prior year, the change in net other costs and revenue included the gain on sale of Historia and Series+ while the current year includes the equity loss of a joint venture offset by distributions received from a venture capital fund investment,” reads the release. That JV is the Rogers-Shaw online video portal, shomi.
Free cash flow for the three and six month periods of $169 million and $362 million, respectively, compared to $158 million and $315 million for the same periods last year. The year-to-date improvement was primarily due to higher operating income before restructuring costs and amortization and lower capital investment, says the release.
"We remain focused on continuous improvement and delivering an exceptional customer experience,” added Shaw in the release. “During the quarter we announced a realignment of customer care operations in our Consumer division into centres of expertise to enhance customer service. All of our customer care operations will continue to be located in Canada and we look forward to continuing to provide our customers with the best and most consistent service possible.
"As we move into the last half of the year we continue to be on track to deliver our fiscal year financial guidance,” continued the CEO. “The new regulatory environment will not be without its challenges, but we support the Government's direction and the Commission's commitment to maximize choice for Canadians. Through our customer centric focus we will continue to move forward proactively, considering and creating innovative options to deliver choice and value to our customers."
That said, the company, just like other video distributors, continues to leak subscribers. Shaw lost 44,158 cable and satellite TV subscribers (not counting business subs) in the quarter. Still a small number overall, but it’s 64% more than the 17,275 video customers lost in Q2 2014. The company also lost 4,443 consumer broadband customers in the quarter (versus an addition of 8,400 internet customers in the second quarter of last year). It also lost just 16,614 consumer telephone customers in Q2, compared to an addition of 3,205 in the same time frame last year.
Operating margins on the consumer side remain strong, however, at 43.6%, a slight rise over 43.3% in Q2 2014.
Media results were in line with other media companies with revenue and income slightly down compared to last year.
Revenue and income on the business services side were up strong (revenue up 8.4% to $129 million in the quarter, operating income up 10% to $65 million), helped along by last year’s acquisition of ViaWest.
