TELUS reports strong results for first quarter 2018
Consolidated revenue and EBITDA growth of 6.0 per cent and 5.2 per cent respectively; Free cash flow of $443 million, up 104 per cent over last year
Strong customer growth including 76,000 new postpaid wireless, Internet and TV customer additions
Postpaid wireless net additions of 48,000, up 9.1 per cent over last year
Surpassed 50 per cent fibre-optic coverage milestone driving strong wireline customer additions of 12,000, up 50 per cent over last year
Industry-leading wireless postpaid churn of 0.95 per cent, demonstrating our continued leadership in customer loyalty
Quarterly dividend increased to $0.525 per share, our 15th dividend increase since 2011
Vancouver, B.C. – TELUS Corporation today released its unaudited results for the first quarter of 2018 that reflect the January 1, 2018 adoption of IFRS 15, Revenue from contracts with customers (IFRS 15) and IFRS 9, Financial Instruments (IFRS 9). Results for the comparative periods in 2017 have been adjusted to reflect the retrospective application of IFRS 15 and IFRS 9. The effects of IFRS 15 are most pronounced in our wireless and consolidated results, while IFRS 9 does not currently have a material effect on our financial performance. See note 2 in the 2018 first quarter interim consolidated financial statements for a full description and breakdown of the associated impacts.
For the quarter, consolidated operating revenue increased by 6.0 per cent to $3.4 billion in the first quarter of 2018, over the same quarter a year ago, primarily due to higher consolidated service revenues, reflecting continued growth in wireless network revenue and wireline data services revenue. Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased by 2.7 per cent to $1.3 billion due to higher service revenue growth, partially offset by increased costs to support higher wireless gross loading and retention volumes as well as from increased employee benefits expense due to recent acquisitions. Adjusted EBITDA was up 5.2 per cent when excluding restructuring and other costs. Excluding the effects of IFRS 15, consolidated revenue and adjusted EBITDA were higher by 6.2 per cent and 4.7 per cent respectively.
“TELUS’ first quarter results reflect strong operational and financial performance, including healthy revenue and EBITDA expansion across both our wireless and wireline product portfolios in concert with robust customer growth”, said Darren Entwistle, President and CEO. “Our continued strong performance is owing in no small part to the TELUS team’s unparalleled dedication to providing consistently exceptional customer experiences. We once again achieved industry-leading wireless churn, and we are now in our fifth year of earning a churn rate below one per cent. Our leadership in customer loyalty was further evidenced by the Commission for Complaints for Telecom-Television Services mid-year report, released in April, in which TELUS received the fewest complaints of any national carrier for the sixth consecutive year. This unrelenting commitment to our Customers First promise is buttressed by our highly differentiated product offerings, as well as the ongoing significant investments we are making in our leading broadband networks and technology. Notably, TELUS once again ranked number one in overall wireless download speeds on a national basis, and amongst the very fastest globally, in the 2018 OpenSignal report released in February.This acknowledgement builds on the significant recognition and numerous awards TELUS received in 2017 in respect of our network excellence.”
Mr. Entwistle added, “Our team achieved an important milestone in the first quarter as we surpassed 50 per cent coverage of our Optik footprint with our broadband network build program. This ongoing expansion will enable more customers to access our leading fibre technology while supporting the continued sustainable growth of our wireline and wireless services, including the advent of 5G. Through the success of our broadband investments, we have demonstrated our ability to consistently drive long-term growth in revenue, EBITDA and EPS, while simultaneously delivering on our dividend growth model and maintaining a robust balance sheet.”
Mr. Entwistle further commented, “Our dividend increase announced today reflects the fifteenth increase since 2011, and is the third in our most recent three-year dividend growth program targeting annual growth between seven and 10 per cent through 2019. Our track record of delivering on our industry-leading, shareholder-friendly initiatives continues to generate significant value for our shareholders. Notably, TELUS has now returned $15.4 billion to shareholders, including $10.2 billion in dividends, representing $26 per share since 2004.”
Doug French, TELUS Executive Vice-President and CFO said, “Together, through our team’s consistent execution of our growth strategy, TELUS once again delivered strong quarterly performance on both a pre and post IFRS 15 accounting change basis. Importantly, this includes free cash flow, which is not impacted by the accounting change, and which expanded by a strong 104 per cent over last year. This is on strategy and in line with our previously stated objective to be free cash flow positive after dividends for the year in 2018, after passing the peak year in our elevated capital investment program last year, and as our broadband network build passes the half-way fibre-optic coverage threshold.”
Mr. French added, “Our thoughtful investments in advanced broadband technologies and customer service excellence continue to advance our network leadership and differentiated value proposition. Our longstanding focus on building leading networks and relentless focus on operational efficiency, combined with maintaining a strong balance sheet, is fueling strong and profitable growth while supporting our leading and long-standing dividend growth program.
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