Telus increases dividend despite profit decline

Telus Corp.’s third-quarter profit fell compared with a year ago because of higher technology investment costs, depreciation and amortization while the telecommunications company increased its dividend.

Net income declined 1.6 per cent to $440 million for the three months to Sept. 30 compared with $447 million the same period in 2018, the company said Thursday.

Basic earnings per share dropped 2.7 per cent to 72 cents a share, it said.

The Vancouver-based company raised its quarterly dividend to 58.25 cents per share from 56.25 cents a share and said it had returned $1.3 billion in dividends to shareholders so far this year.

“Telus has now returned more than $17 billion to shareholders, including over $12 billion in dividends, representing approximately $29 per share since 2004,” Darren Entwistle, president and CEO, said in a statement. “Future dividend growth and affordability will also be supported by lower expected capital expenditures, in line with the preliminary guidance we are providing today for 2020 and 2021, and the resulting free cash flow expansion.”

The company stated preliminary capital spending guidance of approximately $2.75 billion in each of next year and 2021.

Revenue increased 2.6 per cent to $3.7 billion during the quarter compared with the year ago period when excluding the 2018 sale of its Telus Garden unit for $171 million, the company said.

Telus, strongest in Canada’s West where it began before expanding nationally, faces a toughening wireless market after it joined rival Rogers Communications Inc. in scrapping data overage fees.

Telus’s churn rate — the amount of customer turnover — increased slightly to 1.09 per cent during the quarter and the company recorded 10,000 fewer new wireless customers at 193,000 compared to the year-ago period.

Earnings before interest, income taxes, depreciation and amortization increased by 6.3 per cent to $1.4 billion during the three months because of higher wireless revenue growth, increases in wireline data service margins and contributions from customer care, business services and health businesses, Telus said.

Adjusted basic earnings per share rose 2.7 per cent from a year ago to 76 cents a share, which beat analysts’ estimates of 75 cents a share, according to Bloomberg.

Entwistle called it a “robust performance” and championed “generational investments we are making in our leading wireline and wireless broadband network, both of which are integral to the continued success of our long-term growth strategy.”

Financial Post