In its second quarter financial and operating results, Shaw Communications Inc. confirmed that Alek Krstajic, CEO of Freedom Mobile (formerly WIND Mobile) will be stepping down from his post.
“We thank Alek Krstajic for his leadership over this past year,” says Brad Shaw, CEO of Shaw Communications. “During that time, Alek was instrumental in activating Freedom’s LTE-Advanced network and in providing customers with the best value and an enhanced connectivity experience.”
Paul McAleese, COO of Freedom Mobile, will take on the task of guiding the company’s continued growth.
McAleese has more than two decades of experience in the mobile communications industry in Canada, as well as the U.S. and U.K.
Adds Shaw: “We look forward to his leadership in driving Freedom Mobile’s continued success and his contributions as a member of our senior management team.”
Meanwhile, Shaw reported consolidated financial and operating results for the quarter ended February 28, 2017 with revenue from continuing operations for the quarter of $1.3 billion, up by 13.3% over the comparable period. Operating income before restructuring costs and amortization for the quarter was $540 million, representing an increase of 7.6% over the comparable period.
Excluding the results of the Wireless division, acquired on March 1, 2016, revenue for the quarter from the combined Consumer, Business Network Services and Business Infrastructure Services divisions was up 1.1% and operating income before restructuring costs and amortization for the quarter increased 1.8% over the comparable period.
“The strength of our wireline service, particularly our attractive Internet offering, is reflected in our Consumer division’s improved subscriber results,” says Shaw. “When combining our Internet offer with the new BlueSky TV experience, as well as our expanding wireless offering from Freedom Mobile, we are poised to create new value for our customers. Our strong quarterly financial and operating performance shows the resolve of our employees to deliver on Shaw’s long-term key strategic initiatives and their focus on providing exceptional customer experiences.”
Subscriber trends continued to improve. Consumer revenue generating units (“RGUs”) in the second quarter declined by over 5,000, a significant improvement as compared to approximately 41,000 RGU losses in the second quarter of fiscal 2016, says Shaw. This quarter’s Consumer RGU result represents the division’s best since the second quarter of fiscal 2012. This trend of year-over-year improvement continues to be driven by strong Internet subscriber growth linked to the WideOpen Internet 150 value offering and by notable reductions in cable video and phone RGU losses attributed to strong bundle and value plan offerings.
The company also reported significant improvements in wireless postpaid and prepaid subscribers, adding over 33,000 RGUs as compared to nearly 10,000 RGUs gained in the first quarter of fiscal 2017.
Operating income before restructuring costs and amortization for the three and six month periods of $540 million and $1.08 billion, respectively, compared to $502 million and $1.01 billion in fiscal 2016. The increase is attributed primarily to the added Wireless division, says Shaw, but also reflects growth in each of the Business Network Services and Business Infrastructure Services divisions.
The increase in free cash flow for the quarter was largely due to the higher operating income before restructuring costs and amortization, dividends received from the investment in Corus, and lower cash taxes. These improvements were partially offset by the loss of free cash flow generated by the former Media division, which was sold on April 1, 2016 and by higher planned capital expenditures from continuing operations including the addition of capital expenditures in the Wireless division.
Net income from continuing operations for the current quarter of $147 million increased $31 million relative to $116 million in the second quarter of fiscal 2016 mainly due to the addition of the Wireless division and equity income from the investment in Corus in the current year and non-operating costs incurred in the prior year.
The progress of Shaw’s DOCSIS 3.1 upgrade is targeted for completion as planned by the end of fiscal 2017.
“Shaw’s network strength continues to support the success of WideOpen Internet 150, the fastest widely available Internet speed provided in nearly every neighbourhood across our wireline footprint,” comments Shaw. “The combination of this exceptional service with the tremendous value and pricing stability offered through our value plans are providing a positive impact on customer retention.”
Shaw also lauds the BlueSky TV offering, through a partnership with Comcast, which is now available everywhere the company offers cable video. The set-top box offers a new guide, and curated content through the learning of customers’ viewing habits.
“We are optimistic,” says Shaw, “that BlueSky TV combined with WideOpen 150 and flexible TV packages will provide a compelling reason for consumers to stay and switch to Shaw.
“Our senior management team and all of our employees deserve tremendous credit for our successful pivot to becoming an enhanced connectivity company,” he adds. “As we continue the transition through our strategic plan, we will take bolder steps to unlock the power of a combined Shaw and Freedom Mobile to deliver greater value to customers and shareholders.”
Shaw concludes: “In what has been a remarkably fast-paced and dynamic year of innovation, change and growth, we are excited by the potential reflected in the results we have seen so far across our entire business. Most importantly, we are encouraged by the commitment and inspiration that all of our employees have shown to execute on our longer term strategic initiatives and to serve our customers.”