Shaw Announces First Quarter Fiscal 2018 Results
January 11, 2018
Positive and sustainable momentum building in Wireless
- Big Gig data plans offer Canadians everyday choice and value
- iPhone launched at Freedom Mobile to strong customer demand
- AWS-1 spectrum refarming complete in Vancouver, Calgary and Edmonton, significantly enhancing Freedom’s addressable market
- First quarter Wireless revenue increased 26.8% compared to the prior year
- Consumer Internet net gains of 17,000 in the quarter
Calgary, Alberta (January 11, 2018) – Shaw Communications Inc. announces consolidated financial and operating results for the quarter ended November 30, 2017. Chief Executive Officer, Brad Shaw said, “We have created tremendous positive momentum in our Wireless business and we are committed to delivering Canadians sustainable and exceptional value and choice. On the back of our robust LTE-Advanced network, which is improving with every passing day, we launched our Big Gig data plans and the iPhone 8 and iPhone X to strong early demand. With continued improvements to our network and enhanced line up of smartphone devices, customers are recognizing the value proposition of our Big Gig data plans. It is increasingly clear that Canadians have been waiting for a credible wireless alternative and we are ready to deliver.”
Shaw continues to build a best-in-class converged network. In December, the refarm of 10 MHz of AWS-1 spectrum was completed in Vancouver, Calgary and Edmonton, significantly expanding Freedom’s addressable market as the AWS-1 spectrum supports nearly all LTE devices currently in use in Canada. At the same time, the company has also begun deploying the recently acquired 2500 MHz spectrum further improving network quality. With this efficient use of spectrum, millions of Canadians can now bring their own device to Freedom Mobile and enjoy the full benefit of its LTE-Advanced network.
Mr. Shaw added, “Given our balanced approach to Wireline subscriber growth, first quarter results were as expected as we reduce promotional activity and are more selective with retention offers, particularly with video customers. However, demand for our Internet products remains strong and customers continue to value our high-speed services which are available in over 99% of our wireline footprint. Over 90% of new Internet customers are taking speeds of 75 Mbps or faster and over half of those same customers are opting for Shaw’s two-year ValuePlan, showcasing the strength of our network and effectiveness of our flexible packaging options.”
Consolidated revenue from continuing operations for the quarter of $1.25 billion increased by 2.7% over the comparable period. Operating income before restructuring costs and amortization1 for the quarter of $481 million decreased 4.6% over the comparable period.
Net income for the quarter of $114 million compared to $89 million in the first quarter of fiscal 2017. The increase reflects a prior period non-operating loss partially offset by lower operating income from continuing operations and higher income taxes in the current quarter.
Free cash flow for the quarter of $51 million compared to $158 million in the prior year. The decrease for the quarter was largely due to planned higher capital spending and lower operating income before restructuring costs and amortization.
Wireless revenue and operating income before restructuring costs and amortization of $175 million and $35 million improved 26.8% and 16.7% respectively year-over-year. The improvement in Wireless results is primarily due to an increase of approximately 130,000 subscribers this past year to nearly 1.2 million at the end of the current period.
In the quarter, the Company added approximately 34,000 Wireless subscribers, a significant increase from the 9,500 net additions achieved in the first quarter of fiscal 2017. The increase in the customer base reflects the ongoing execution of our wireless growth strategy to improve the network and customer experience.
First quarter Wireline revenue and operating income before restructuring costs and amortization of $1.08 billion and $446 million decreased 0.4% and 5.9%, respectively. The year-over-year decline in Wireline results was driven primarily by Consumer video flow through of promotions that were initiated in the second half of fiscal 2017. The current quarter also reflects increased levels of planned corporate costs relative to the comparable period. Shaw Business continues to deliver stable results, with revenue in the first quarter of $140 million, representing a 6.1% year-over-year improvement. Growth in Business is primarily related to market share gains in the small and medium-sized businesses driven by the Smart suite of products, now including Smart Surveillance which launched in mid-December.
Wireline subscribers declined by approximately 34,000 in the quarter compared to a loss of approximately 30,000 in the first quarter of 2017. Continued strong Internet gains of over 17,000 in the period were more than offset by video, phone and higher seasonal satellite losses.
Brad Shaw concluded, “We are encouraged by the early results in Wireless from both new and existing customers as we continue to take steps to enhance the customer experience. Although we remain in the early stages of our wireless opportunity, the positive momentum that we have created over the last several months will become increasingly apparent in our results as we move forward.”
Accordingly, the Company is confirming that it remains on track to meet its fiscal 2018 guidance which includes consolidated operating income before restructuring costs and amortization growing to approximately $2.1 billion – an increase of approximately 5% over fiscal 2017; capital investments of approximately $1.38 billion; and free cash flow of approximately $375 million. We expect the majority of the growth in consolidated operating income before restructuring costs and amortization to occur in the back half of the fiscal year.
Shaw Communications Inc. is a leading Canadian connectivity company. The Wireline division consists of Consumer and Business services. Consumer serves residential customers with broadband Internet, Shaw Go WiFi, video and digital phone. Business provides business customers with Internet, data, WiFi, digital phone, and video services. The Wireless division provides wireless voice and data services through an expanding and improving mobile wireless network infrastructure.
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, SJR.PR.A, SJR.PR.B, NYSE – SJR, and TSXV – SJR.A). For more information, please visit www.shaw.ca
The accompanying Management’s Discussion and Analysis (“MD&A”) forms part of this news release and the “Caution concerning forward-looking statements” applies to all the forward-looking statements made in this news release.
For more information, please contact:
Shaw Investor Relations
Shaw is an enhanced connectivity provider. Our Consumer division serves consumers with broadband Internet, Shaw Go WiFi, video and digital phone. Our Wireless division provides wireless voice and data services through an expanding and improving mobile wireless network infrastructure. The Business Network Services division provides business customers with Internet, data, WiFi, telephony and video.
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, SJR.PR.A, SJR.PR.B, NYSE – SJR, and TSXV – SJR.A). For more information, please visit www.shaw.ca.
For further information, please contact:
Shaw Investor Relations