Telus boosts revenues by 6.6%

9 May 2008

Telus Corporation has reported its financial results for the quarter ended 31 March 2008, including net income of CAD291 million (USD290 million), up 49% year-on-year, and a 6.6% rise in revenues to CAD2.35 billion compared to a year ago. Net income decreased 4% if excluding a CAD173.5 million net-cash settlement expense recorded in the first quarter of 2007, whilst net profit in the most recent quarter also included favourable tax adjustments of CAD17 million, compared to CAD4 million in Q1 2007. Turnover growth was driven by a 10% increase in wireless revenues and a 19% rise in wireline data revenues, which was aided by two strategic acquisitions in January – Emergis, a business process outsourcer, and Fastvibe, a provider of web streaming solutions for businesses. Emergis has been rebranded to ‘Emergis, a Telus company’ whilst Fastvibe now operates under the Telus brand. In late March, Telus also launched a new low-cost mobile brand, Koodo Mobile, targeting young adults. Telus’s EBITDA increased 24% year-on-year in Q1 2008 to CAD950 million, largely due to the previous year’s net-cash settlement. Excluding this expense, underlying EBITDA increased slightly by CAD12 million as ongoing growth in wireless was largely offset by a reduced EBITDA in the wireline segment. Free cash flow was up 21% to CAD580 million this quarter, driven primarily by higher EBITDA and a 16.3% year-on-year reduction in CAPEX from CAD382 million to CAD320 million. Canada’s second largest full-service telco reported that its total fixed lines in service declined by 39,000 in the quarter, and 3.6% year-on-year, whilst it added 20,300 net new high speed internet subscribers (a growth rate 37% lower than a year ago, reflecting strong competition and market maturity). Net wireless subscriber additions were 88,400 in Q1, representing a 2.3% decrease from the total sign-ups in the same period of 2007. Post-paid net adds reached 72,400 (19% more than last year), and net pre-paid additions were 46% lower at 16,000.