Shaw announces fourth quarter and full year financial and operating results and preliminary fiscal 2013 guidance
October 25, 2012
- Fourth quarter consolidated revenues improved 3% and operating income before amortization was up 4%. On a full year basis revenues improved 5% and operating income before amortization increased 4%.
- Cable margin of 49% reflects revenue growth and cost management. While competition is intense the operational focus remains on profitable and sustainable growth initiatives.
- Net income was $133 million for the quarter or $0.28 per share. On an annual basis net income was up 36% over last year to $761 million, or $1.62 per share.
Calgary, Alberta (October 25, 2012) — Shaw Communications Inc. announced consolidated financial and operating results for the fourth quarter and year ended August 31, 2012 and 2011. Consolidated revenue for the three month period of $1.21 billion was up 3% compared to the same period last year while the annual amount of $5.0 billion improved 5%. Total operating income before amortization1 for the quarter and annual period of $501 million and $2.13 billion, respectively, each improved 4% over the comparable periods.
Free cash flow1 for the three and twelve month periods were $103 million and $482 million, respectively, compared to $49 million and $617 million for the same periods last year. Increased operating income before amortization and reduced capital investment were the main drivers of the quarterly improvement. On an annual basis improved operating income before amortization was more than offset by increased capital investment, CRTC benefit funding, and cash taxes.
Chief Executive Officer Brad Shaw said, “Our financial performance in the quarter was solid as we balanced subscriber growth and profitability. The competitive environment continues to be intense and we remain focused on strengthening our core business through technology, customer service and value leadership.”
“We continue to leverage our advanced network rolling out a number of new products and services this year bringing innovation, choice and value to our customers. Our investments in technology include the ongoing expansion of the WiFi network footprint, our Digital Network Upgrade (“DNU”), broader offers of leading internet speeds, and the first phase of our TV Everywhere service, with the launches of Movie Central Go and NFL Sunday Ticket Go. A significant focus was also improved customer service with investment in our Canadian call centres, additional staffing, and customer care tool enhancements to ensure an exceptional customer experience.”
Net income from continuing operations of $133 million or $0.28 per share for the quarter ended August 31, 2012 compared to $167 million or $0.37 per share for the same period last year. Net income from continuing operations for the annual period was $761 million or $1.62 per share compared to $559 million or $1.23 per share in the prior year. All periods included nonoperating items which are more fully detailed in Management’s Discussions and Analysis (“MD&A”).2 The prior annual period included a charge of $139 million for the discounted value of the CRTC benefit obligation related to the acquisition of Shaw Media, as well as business acquisition, integration and restructuring expenses of $91 million. Excluding the non-operating items, net income from continuing operations for the three and twelve month periods ended August 31, 2012 would have been $153 million and $760 million, respectively, compared to $153 million and $717 million in the same periods last year.
Revenue in the Cable division of $803 million and $3.19 billion for the current three and twelve month periods increased 2% and 3%, respectively, over the comparable periods. Operating income before amortization for the quarter of $396 million was comparable to last year. The annual operating income before amortization of $1.50 billion was down marginally from $1.51 billion in the prior year. Quarterly financial results improved compared to the second and third quarters with margins increasing from 44% to 47% to 49%, respectively, mainly due to improved revenues combined with operational cost controls and disciplined promotional activity.
Satellite revenue of $213 million and $844 million for the three and twelve month periods, respectively, was up 3% and 2%, respectively, compared to the same periods last year. Operating income before amortization for the current quarter and annual period of $77 million and $293 million improved 5% and 1%, respectively.
Revenue in the Media division was up 3% for the quarter to $217 million and operating income before amortization was $28 million compared to $12 million last year. For informational purposes, on a comparative basis to the prior year, Media revenues for the full twelve month period were down 2% and operating income before amortization was up 2%. The revenue decline was due to lower conventional advertising revenues while the improvement in operating income before amortization was due to lower programming costs year-over-year.
Brad Shaw continued, “As we enter the new fiscal year we expect growth in consolidated revenue and operating income before amortization. Capital investment is expected to marginally decline from 2012 spend levels as we continue to enhance our network, provide innovative product offerings, and launch the new Anik G1 satellite. Combined with higher cash taxes, we expect free cash flow to be comparable to fiscal 2012.”
Mr. Shaw concluded, “The business is dynamic and continually evolving. Our growth oriented asset mix, solid investment grade balance sheet and committed employee base position us well to meet the challenges and leverage the opportunities in the year ahead delivering value to all of our stakeholders.”
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.
2 See reconciliation of Net income from continuing operations in Consolidated Overview in MD&A.
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 3.4 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 Television 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).
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Shaw Communications Inc.
VP, External Affairs