CALGARY – Shaw Communications saw fourth quarter profits more than triple, helped by a lift in wireless and internet subscribers, the company reported Thursday.
For the three month period ended August 31, 2017, Shaw saw net income jump to $481 million from $154 million in the same period last year, which it said reflects a $330 million gain on the sale of U.S. data centre business ViaWest Inc.
Net income for fiscal 2017 was $851 million, down from the $1.2 billion reported in fiscal 2016, due to higher net income from discontinued operations in fiscal 2016, including the gain on the sale of the former Media division, partially offset by higher non-operating gains in fiscal 2017.
Revenue from continuing operations of $1.24 billion for the quarter and $4.88 billion for the year increased by 2.6% and 8.1%, respectively, over the comparable periods in fiscal 2016. Operating income before restructuring costs and amortization of $479 million for the fourth quarter and $2.0 billion for the year decreased 6.8% and increased 1.0%, respectively, over the comparable periods in fiscal 2016.
Free cash flow for the three and twelve month periods of $2 million and $438 million, respectively, compared to $9 million and $482 million in fiscal 2016. The annual decrease in free cash flow was largely due to higher planned capital expenditures and by the loss of free cash flow generated in the prior year by the former Media division which was sold on April 1, 2016, partially offset by lower cash taxes and higher dividends from equity accounted associates.
In the quarter, Shaw continued its momentum of improving subscriber trends with consolidated revenue generating units (RGU) net gains of 66,366 and 136,281 for the full fiscal year highlighted by a second consecutive quarter of cable Video RGU growth and a year-over-year turnaround in overall RGU trends, including five consecutive quarters of net gains in Internet RGUs.
The Consumer division added a net 25,000 RGUs in the year (21,000 in the quarter) representing a substantial turnaround over the 170,000 RGU loss in fiscal 2016. Net gains in the year included the addition of 73,000 Internet RGUs, partially offset by net losses in phone of 31,000 and 17,000 in satellite Video RGUs. Cable Video RGU performance also contributed heavily to the Consumer division's overall RGU performance. Net positive cable Video adds in fiscal 2017 represented a significant improvement over the 93,000 of losses in fiscal 2016.
In the quarter, the Consumer division added 21,794 RGUs as compared to the 37,104 RGU year-over-year. Net gains in the quarter included the addition of 22,045 Internet RGUs, 7,567 cable Video RGUs partially offset by net losses in phone of 4,535 and 3,283 in satellite Video RGUs. Shaw said that the successful reversal of subscriber trends has been led by WideOpen Internet 150, its Video portfolio led by BlueSky TV, and compelling bundle and value plan offerings across all product lines.
In Wireless, Shaw continued to grow postpaid and prepaid wireless subscribers, gaining a combined 103,885 RGUs in the year and 41,014 in the quarter, driven by an expanded handset lineup, simplified packaging and pricing on its new LTE-Advanced network, as well as targeted seasonal promotional activity.
CEO Brad Shaw said that said the company "set out to change the trajectory of our consumer subscriber performance" in 2017 and that he's “delighted with the results." Later, in the company's conference call with financial analysts, the company disclosed another delight – Freedom Mobile customers will soon have access to Apple's iPhone. "We have finalized an agreement with Apple to bring iPhone to our wireless customers," said Shaw, "and we look forward to future announcements on iPhone availability and pricing."
“We invested purposefully to enable this performance and all the while I am pleased to report that our full year financial results met our guidance commitments”, Shaw said in a statement. “We are in the early stages of our journey and I am excited with the progress we made in fiscal 2017. We are executing our strategic initiatives and in the year we continued to optimize our mix of core assets with the sale of ViaWest and the acquisition of 700 MHz and 2500 MHz spectrum licences in our core markets, which will enable a richer customer experience over time."
Shaw offered its fiscal 2018 guidance, which includes consolidated operating income before restructuring costs and amortization growing to approximately $2.1 billion – an increase of approximately 5% over fiscal 2017.
In a separate announcement Thursday, Shaw said that it has nominated Mike Sievert, currently the chief operating officer for T-Mobile US, to its board of directors at its annual general meeting scheduled for January 11, 2018. Sievert has also held senior roles at organizations including Clearwire, Microsoft, AT&T Wireless and E*TRADE Financial.
More on Shaw’s financial results is available here.
