Shaw Communications, the parent company of Freedom Mobile, released its second-quarter financial earnings report today.
The company recorded a net loss of $164 million for the three month period ending February 28th, 2018, but over double the postpaid wireless subscriber additions achieved last quarter.
In the same period, however, it lost 3,800 prepaid subscribers, bringing net wireless revenue generating units to 89,700.
Even this number is a substantial increase on last quarter’s roughly 34,000 additions, and far higher than financial analysts’ consensus prediction of 45,000 additions.
Freedom Mobile now has a total of 1,271,185 wireless subscribers. As of February 28, 2018, total postpaid subscribers are now 890,649, while 380,536 are prepaid.
Shaw said the increase in wireless customers reflects customer demand for the iPhone, launched December 8th at Freedom Mobile, as well as its device pricing and packaging options.
Shaw further asserted that the additions showed the success of its “wireless growth strategy to improve the network and customer experience.”
“Our strong second quarter results clearly show that Canadians have a demand for a truly competitive wireless option,” said CEO Brad Shaw in a press statement.
“Our strategy to grow our wireless business has been simple: create a wireless provider that offers fairness and value to Canadians and that respects people’s desire to connect when they want, how much they want, and on the iconic devices they want.”
The financial news wasn’t as rosy, however. The company reported a restructuring charge of $417 million CAD related to its ‘Total Business Transformation’ initiative, which saw 3,300 employees accept buyout packages in February.
This was the major contributor to its net loss of $164 million. That number compares to net income of $147 million during the same time period last year.
Shaw assured investors, however, that it does not anticipate the full-year restructuring costs to exceed $450 million.
Meanwhile, Shaw predicted the annualized savings related to the voluntary departure program will be approximately $215 million and will be fully realized in fiscal 2020.
Shaw’s release stated that it remains on track to meet its fiscal 2018 guidance, which includes consolidated operating income before restructuring costs and amortization of $2.1 billion, a five percent increase over fiscal 2017.
Total wireless revenue for this period came in at $290 million. Wireless operating income before restructuring costs and amortization of $36 million improved 24 percent year-over-year. Shaw said this is due to growth in subscribers and higher average revenue per unit (ARPU), but was partially offset by incremental costs from higher subscriber loading in the period and margin pressure from significantly higher equipment sales.
Shaw also announced in an accompanying press release that it would begin selling Freedom Mobile handsets and service plans in approximately 100 of Loblaws’ The Mobile Shop locations in April. Further, it noted that it has refarmed 10MHz of AWS-1 spectrum across its footprint.
As for wireline, revenue and operating income before restructuring costs and amortization of $1.07 billion and $465 million remained flat and declined 1.9 percent, respectively. Shaw reported this aspect of its business continues to be impacted by a challenging consumer video environment, including a declining customer base and a general shift into lower-priced video packages.