Shaw announces second quarter financial and operating results and updated 2013 guidance
April 12, 2013
- Second quarter and year-to-date consolidated revenues improved 2% over the same periods last year and operating income before amortization was up 9% for the quarter and 8% for the six months ended February 28, 2013
- Net income was $182 million for the quarter and $417 million for the year-to-date period
- 2013 financial guidance updated with significant increase in free cash flow which is now expected to approximate $550 million
Calgary, Alberta (April 12, 2013) — Shaw Communications Inc. announced consolidated financial and operating results for the three and six months ended February 28, 2013 and February 29, 2012. Consolidated revenue for the three and six month periods of $1.25 billion and $2.57 billion, respectively, was up 2% over each of the comparable periods last year. Total operating income before amortization1 of $538 million improved 9% over the comparable quarterly period and the year-to-date amount of $1.14 billion was up 8%.
Free cash flow1 for the three and six month periods was $161 million and $405 million, respectively, compared to $57 million and $176 million for the comparable periods last year. Increased operating income before amortization and lower capital investment during the first half of 2013 were the main drivers of the improvement.
Chief Executive Officer Brad Shaw said, "Our second quarter financial results were solid reflecting the underlying strength across our businesses as we focus on sustainable and profitable growth. We remain focused on providing an exceptional customer experience as we continue to leverage our leading network infrastructure and high quality content to enhance and expand innovative product offerings for our customers."
Mr. Shaw continued, "Over the past several months we announced several strategic transactions with each of Rogers and Corus that will provide estimated net proceeds to Shaw of approximately $800 million. We plan to invest up to $500 million of these net proceeds back into our core business over fiscal 2013, 2014 and 2015 accelerating our investment in certain strategic capital initiatives. Key investments to be accelerated include the completion of our Calgary data centre, further digitization of our network and additional bandwidth upgrades, development of IP delivery of video, expansion of our WiFi network, and additional innovative product offerings related to Shaw Go and other applications to provide an enhanced customer experience.
Most recently we announced entering into a transaction to acquire ENMAX Envision Inc. ("Envision"), a company providing leading telecommunication services to Calgary and surrounding area business customers, for approximately $225 million. This acquisition demonstrates our commitment to investing in and growing our Business Services. We look forward to serving our new customers and adding the Envision employees and management to our team."
Net income of $182 million or $0.38 per share for the quarter ended February 28, 2013 compared to $178 million or $0.38 per share for the same period last year. Improved operating income was partially offset by higher income taxes in the current quarter. Net income for the first six months of the year was $417 million or $0.88 per share compared to $380 million or $0.81 per share. Increased operating income before amortization accounted for the improvement.
Revenue in the Cable division of $814 million and $1.62 billion for the current three and six month periods increased 1% and 2%, respectively, over the comparable periods. Operating income before amortization for the quarter of $393 million was up 12% compared to the same quarter last year and the year-to-date period improved 8% to $789 million.
Satellite revenue of $209 million and $423 million for the three and six month periods, respectively, compared to $211 million and $420 million in the same periods last year. Operating income before amortization for the current quarter was $73 million compared to $71 million last year and the year-to-date amount was up 5% to $147 million.
Revenue and operating income before amortization in the Media division for the quarter of $249 million and $72 million, respectively, each increased 3% over the same period last year. On a year-to-date basis Media revenue improved 5% and operating income before amortization was up 7%.
Brad Shaw continued, "We announced preliminary guidance in October 2012 and are today updating our free cash flow guidance. With the first half of the year behind us and modest positive variances across service operating income before amortization, capital investment and interest and cash taxes, we now expect free cash flow to approximate $550 million. We expect our capital spend to ramp up during the last half of the year with the annual spend still expected to decline marginally from 2012 levels." (The accelerated capital investment funded through the accelerated capital fund is not included in free cash flow. See further discussion in Management’s Discussion and Analysis.)
In January the Board of Directors approved a 5% increase in the equivalent annual dividend rate to $1.02 on Shaw's Class B Non-Voting Participating shares and $1.0175 on Shaw's Class A Participating shares. This new rate was effective commencing with the monthly dividends paid on March 27, 2013.
Mr. Shaw concluded, "We are operating in a dynamic competitive environment where driving performance through continuous improvement and leveraging opportunities as they arise is necessary. Financial performance for the first half of the year and the various strategic transactions recently announced demonstrate the ability of our leadership team to create value and sustainable long-term growth for our shareholders."
Shaw Communications Inc. is a diversified communications and media company, providing consumers with broadband cable television, High-Speed Internet, Home Phone, telecommunications services (through Shaw Business), satellite direct-to-home services (through Shaw Direct) and engaging programming content (through Shaw Media). Shaw serves 3.3 million customers, through a reliable and extensive fibre network. Shaw Media operates one of the largest conventional television networks in Canada, Global Television, and 19 specialty networks including HGTV Canada, Food Network Canada, History and Showcase. Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 Index (Symbol: TSX – SJR.B, NYSE – SJR).
The accompanying Management’s Discussion and Analysis forms part of this news release and the "Caution Concerning Forward Looking Statements" applies to all forward-looking statements made in this news release.1 See definitions and discussion under Key Performance Drivers in MD&A.
For further information, please contact:
Shaw Communications Inc.
VP, External Affairs