VANCOUVER – A strong performance by the company’s wireless division helped lead Telus Corporation to strong revenue and income growth in the second quarter of 2005, ended June 30th.
Consolidated operating revenues in the quarter came in at $2 billion, up 8% from a year ago while operating income was up 24%. Earnings per share for the second quarter were 53 cents, up 10% compared from Q2 2004 and net income was $189.5 million, a 10% increase.
While praising the company’s results Telus president and CEO Darren Entwistle also addressed the current strike by its employees in British Columbia and Alberta. “As highlighted last quarter, we are striving to bring the collective bargaining process to a positive conclusion for all stakeholders. A major positive step forward was taken in July as we commenced implementation of a new comprehensive collective agreement for TWU bargaining unit employees,” he said in a release.
“While the recent strike action by the TWU presents a challenge for employees and some customers, I am heartened by the support of management and bargaining unit team members alike that have responded positively to the work stoppage in support of Telus and our customers. Approximately 70% of our team members continue to work to serve our customers. Our desire at the end of the day is to have all unionized team members share in our ongoing financial success, which our comprehensive offer ensures."
“We generated record quarterly wireless revenue and EBITDA in addition to setting a new second quarter record for cash flow and subscriber additions. We were also pleased with our wireline revenue growth, led by strong data results while local and long distance revenue were stable in the face of increased competitive pressure and line losses. Telus continues to produce significant quarterly free cash flow of over $200 million. After repurchasing 6.5 million shares during the quarter for an outlay of $272 million, Telus still maintained a significant cash balance of $1.1 billion at quarter end,” added Robert McFarlane, executive vice president and CFO.
“We are ready to distribute approximately $200 million of past period and lump sum payments to TWU employees on ratification of their new collective agreement. Reflecting positive year to date results and the successful implementation of our emergency operations plan to address the labour disruption in Western Canada, we are maintaining our existing 2005 guidance."
Telus Mobility posted very strong results, as have all of Canada’s wireless telephony companies. Revenues from wireless increased by 19% to $802 million in the second quarter of 2005, compared with the same period in 2004. EBITDA increased by $80 million to $367 million and EBITDA margin expanded by 3.5 points to 49% of network revenue, and by 3.4 points to 45% of total revenue. ARPU (average revenue per subscriber unit) increased markedly by $2 to $61 while cost of acquisition ("COA") per gross subscriber improved to $342from $381.
Net subscriber additions were 131,100 in the quarter, improved 15% from a year ago. Higher revenue-generating postpaid subscriber net additions of 103,900 represented 79% of total net additions and blended monthly churn increased slightly to 1.37% from 1.32% when compared to the same quarter a year ago. Post paid churn was 1.05%.
When it comes to the western telco’s TV plans, Telus is still remaining vague, with the release saying only: “The trial of Telus TV services by employees continues in larger centres in Telus’ Western incumbent region. The Company continues to evaluate if and when to launch video entertainment services, considering four principal factors for the service: (i) a positive return on investment, which leverages past investments in high speed Internet; (ii) non-price differentiating service attributes; (iii) technical soundness of technology; and (iv) a positive service delivery experience. In July 2005, the Canadian Radio-television and Telecommunications Commission ("CRTC") approved Telus’ application for a broadcasting distribution undertaking license to service parts of Eastern Québec. This license provides a new market for Telus TV services, should Telus decide to launch in the future.”
