Shaw Communications released their first quarter results for the 2017 fiscal year.
Most noticeably, profits took a 59.2 percent hit, mainly due to the initial wind-down of Shomi, which ceased operation on November 30th. Shaw took on a $107 million CAD charge towards this venture in the first quarter before the division’s shutdown in November 2016.
Shaw’s net income fell $0.18 per share, or $89 million, down from $0.43 per share, or $218 million from the same time last year. Revenue however, rose 15 percent to $1.31 billion from $1.14 billion in the same period a year earlier. This past quarter ended on November 30.
It’s also important to note that Shaw’s net income of$89 million for the current quarter is also down by $65 million from the fourth quarter of 2016, which came in at from $154 million.
Wireless revenues slowly gaining speed
Wireless revenues totalled $138 million this quarter, down $10 million compared to the fourth quarter due to a reduction in handset revenue and a 1.5 percent decrease in average revenue per unit (ARPU), or earnings per consumer, to $36.84.
Shaw’s postpaid wireless subscribers in Q1 2017 are up 14,307 since the previous quarter, while the telco’s prepaid subscriber rate saw a 4,837-consumer decrease.
Shaw’s total wireless subscribers increased by 9,470 to reach 1,052,758. Regardless, the company’s total subscriber base amongst all products decreased to 6,801,706, which represents a loss of 20,962 subscribers since the fourth quarter of 2016.
While Shaw saw a decrease in every segment of its subscriber base, that is in Consumer, Business Network Services and the newly refurbished Wireless divisions, these decreases were notably less dramatic than those experienced a year prior.
Shaw’s Consumer product subscribers (which include cable, satellite, internet and phone) saw a decrease of 29,696 subscribers compared to the decrease of 43,750 it experienced a year prior.
“We achieved three important milestones in our Wireless division this quarter”
Shaw is currently Canada’s fourth largest wireless provider, and acquired Wind Mobile last March. Recently, Wind underwent a rebrand to become Freedom Mobile, which is currently in the process of rolling out its long-awaited LTE network.
The earnings report contributes the addition of almost 9,500 revenue generating units to the rollout of its LTE-Advanced network, which has currently expanded only into the greater Toronto and Vancouver regions.
Shortly after acquiring Wind (Freedom) Mobile in February, Shaw sold 100 percent of its wholly owned subsidiary Shaw Media Inc. to Corus Entertainment for $2.65 billion.
“We achieved three important milestones in our Wireless division this quarter. First, we launched the new Freedom Mobile brand, anchored by a commitment of trust and transparency for our customers. Second, the rollout of our LTE-Advanced network in the key markets of central Toronto and central Vancouver. Third, the introduction of the Freedom Wi-Fi trial, allowing customers to connect to over 65,000 Shaw Go WiFi hotspots across Alberta and British Columbia,” said Shaw CEO Brad Shaw in a statement.
A restructuring year for Shaw
Shaw’s guidance for the 2017 year remains unchanged. Operating income before restructuring costs is expected to fall between $2.125 and $2.175 billion.
Shaw refers to restructuring costs frequently throughout the documents as a main reason for the decreases demonstrated over the past quarter. However, while “restructuring costs” are often used as a euphemism by corporations to signify a dip in profits, it seems that Shaw Communications is accurate in its claim.
This report comes immediately after Shaw debuted, BlueSky, a new internet protocol TV platform (IPTV), in to attempt to lure back customers that were lost to Telus’ IPTV service Optik TV in the Western provinces.
Stepping back, having begun the year with the $1.6 billion acquisition of Freedom — formerly Wind — Mobile, only to follow it up a few months later with the sale of its media arm to Corus Entertainment for $2.65 billion, the year was already off to a tumultuous start.
Fast forward to September, and the company jointly announced the shutdown of the video streaming asset it owned with Rogers Communications, Shomi. Upon this shutdown, earnings reports revealed that Shaw had taken a $136 million dollar bath to support the streaming service over the past year, which represents just its half of the total costs.
Just one month later, the company capped off the year by announcing the official rebrand of Wind Mobile to Freedom Mobile along with the much anticipated rollout of its LTE network.
Shaw, 2016 has been quite a ride.