Telus earns $447-mil­lion in Q3, boosts div­i­dend

Telus Corp. earned $447-mil­lion on rev­enue of $3,774-mil­lion in the third quar­ter of 2018. It has also in­creased its div­i­dend to 54.5 cents per share.

Stockwatch Daily - - FRONT PAGE - Mr. Dar­ren En­twistle re­ports

TELUS CORP. has re­leased its unaudited re­sults for the third quar­ter of 2018. For the quar­ter, con­sol­i­dated op­er­at­ing rev­enue of $3.8-bil­lion in­creased by 11 per cent over the same pe­riod a year ago. This growth was driven by higher wire­less net­work and equip­ment rev­enues, wire­line ser­vices rev­enue growth, and higher other op­er­at­ing in­come re­sult­ing from the com­pany’s share of the non-re­cur­ring eq­uity in­come re­lated to real es­tate joint ven­tures of $171-mil­lion aris­ing from the sale of Telus Gar­den. Ex­clud­ing this eq­uity in­come, con­sol­i­dated op­er­at­ing rev­enue in­creased by 5.8 per cent. Earn­ings be­fore in­ter­est, in­come taxes, de­pre­ci­a­tion and amor­ti­za­tion (EBITDA) in­creased by 8.2 per cent to $1.3-bil­lion due to higher rev­enue growth as ref­er­enced above and im­proved wire­less equip­ment mar­gins. Ad­justed EBITDA was up 6.4 per cent when ex­clud­ing the net gain from the sale of Telus Gar­den, as well as re­struc­tur­ing and other costs, which in­cluded the com­pany’s com­mit­ted do­na­tion of $118-mil­lion to the Telus Friendly Fu­ture Foun­da­tion.

“Telus re­ported strong op­er­a­tional and fi­nan­cial re­sults for the third quar­ter, in­clud­ing ro­bust cus­tomer growth across both the wire­less and wire­line seg­ments of our busi­ness. This was but­tressed by a con­tin­ued ex­cel­lent per­for­mance in wire­less and wire­line cus­tomer loy­alty and life­time rev­enue,” said Dar­ren En­twistle, pres­i­dent and chief ex­ec­u­tive of­fi­cer. “Im­por­tantly, the Telus team con­tin­ues to achieve in­dus­try-lead­ing post­paid wire­less churn, and re­al­ized record third quar­ter high-speed In­ter­net and TV re­ten­tion lev­els. This per­for­mance was driven by our team’s re­lent­less fo­cus on pro­vid­ing ex­cep­tional cus­tomer ex­pe­ri­ences, and was

an­chored by the on­go­ing gen­er­a­tional in­vest­ments we are mak­ing in our lead­ing broad­band wire­line and wire­less net­works, both of which are hall­marks of Telus’s suc­cess­ful, long-term growth strat­egy.”

Doug French, ex­ec­u­tive vice-pres­i­dent and chief fi­nan­cial of­fi­cer, said: “As we head into the sea­son­ally im­por­tant fi­nal quar­ter of 2018, we re­main fo­cused on ex­e­cut­ing against our strat­egy, am­pli­fy­ing our ef­forts on cost-ef­fi­ciency, fo­cus­ing on mar­gin ac­cre­tive cus­tomer growth and in­vest­ing to sup­port our growth strat­egy. To­day we are rais­ing our full-year 2018 as­sump­tion for re­struc­tur­ing and other costs, in­clud­ing an ad­di­tional $50-mil­lion tar­geted to­wards fur­ther stream­lin­ing our busi­ness and en­hanc­ing our ef­fec­tive­ness in serv­ing our grow­ing cus­tomer base. This ad­di­tional in­vest­ment in re­struc­tur­ing, to be recorded in the fourth quar­ter of 2018, is ex­pected to de­liver an­nual cost sav­ings of more than $50-mil­lion be­gin­ning next year. Mean­while, our net debt to EBITDA lever­age ra­tio con­tin­ues to im­prove, putting us in good po­si­tion for 2019.”

In the quar­ter, the com­pany at­tracted 199,000 new wire­less, high-speed In­ter­net and Telus TV cus­tomers, up 47,000 or 31 per cent over the same quar­ter a year ago. The higher net ad­di­tions in­cluded 145,000 wire­less net ad­di­tions, in­clud­ing 109,000 post­paid net ad di­tions, as we ll as 36,000 high-speed In­ter­net sub­scribers and 18,000 Telus TV cus­tomers.

For the quar­ter, net in­come of $447-mil­lion in­creased by 10 per cent over the same pe­riod a year ago as EBITDA growth was partly off­set b y higher de pre­ci­a­tion and amor­ti­za­tion due to growth in the com­pany’s as­set base re­sult­ing in part from busi­ness ac­qui­si­tions as well as in­creased fi­nanc­ing costs. Ba­sic earn­ings per share (EPS) of 74 cents rose by 8.8 per cent over the same pe­riod last year. Ad­justed net in­come of $445-mil­lion in­creased by 6.7 per cent over the same pe­riod a year ago, while ad­justed EPS of 74 cents rose by 5.7 per cent.

(See T Ta­ble 1 on page 26)

Telus sets pre­lim­i­nary 2019 cap­i­tal ex­pen­di­ture tar­get Cap­i­tal ex­pen­di­tures for 2019, ex­clud­ing the pur­chase of spec­trum li­cences, is es­ti­mated to be sim­i­lar to the com­pany’s 2018 tar­get of ap­prox­i­mately $2.85-bil­lion. In 2019, the com­pany will con­tinue con­nect­ing more homes and busi­nesses di­rectly to its fi­bre op­tic net­work, fur­ther ex­pand­ing the com­pany’s PureFi­bre foot­print, while con­tin­u­ing to ad­vance its small-cell tech­nol­ogy strat­egy to im­prove cov­er­age and pre­pare for a more ef­fi­cient and timely evo­lu­tion to 5G. Ad­di­tion­ally, the com­pany plans to con­tinue in­vest­ing in its sup­port sys­tems. Div­i­dend dec­la­ra­tion — quar­terly div­i­dend in­creased to 54.5 cents per share The Telus board of di­rec­tors has de­clared a quar­terly div­i­dend of 54.5 cents per share on the is­sued and out­stand­ing com­mon shares of the com­pany payable on Jan. 2, 2019, to hold­ers of record at the close of busi­ness on Dec. 11, 2018. This fourth quar­ter div­i­dend rep­re­sents an in­crease of four cents or 7.9 per cent from the 50.5-cent quar­terly div­i­dend paid on Jan. 2, 2018, and is the 16th div­i­dend in­crease since Telus an­nounced its orig­i­nal mult iyear div idend growth pro­gram in May, 2011.

Denise Pick­ett joins board of di­rec­tors Ef­fec­tive Nov. 1, 2018, Denise Pick­ett joined the com­pany’s board. Ms. Pick­ett was named chief risk of­fi­cer and pres­i­dent, global risk, bank­ing and com­pli­ance, Amer­i­can Ex­press in Fe­bru­ary, 2018.

We seek Safe Har­bor.

Erika Flores con­densed this news re­lease (erikaf@stock­

Richard H Auchin­leck, Ray­mond Tat­sun Chan, Stock­well Burt Jr Day, Lisa de Wilde, Dar­ren En­twistle, Mary Jo Had­dad, Kathy Kin­loch, William A MacK­in­non, John Paul Man­ley, Sarab­jit S Mar­wah, Claude Mongeau, David L Mowat, Marc Par­ent

(T) Shares: 598,193,124

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