Shaw Communications released its third quarter (Q3) financials today and said it will accelerate capital expenditure plans on the back of its strong revenue growth.
Rate increases and customer growth drove both cable and satellite revenues higher last quarter versus the same quarter in 2006. Cable service revenue increased 14.3% to C$526.9 million and Satellite division service revenue increased 5.9% to C$175.4 million. Consolidated service revenue rose 12.1% to C$702.2 million in Q3 versus C$626 million for the same quarter in 2006.
Subscriber growth was evident across segments. Shaw’s basic cable subscriber base grew by 3,289 in the quarter to 2.2 million while digital subscribers rose by 20,875 to a total of 747,431. Internet customers were up by 27,873 to 1.4 million. A total of 5,337 DTH customers were added to bring that base to 877,899. Digital phone lines took a big jump, rising by a figure of 51,128 to 343,753.
Shaw’s total service operating income before amortization rose 11.2% to C$310.7 million from C$279.5 million a year ago.
Funds flow from operations increased to C$259.5 million for the quarter from C$221.1 million in Q3 2006.
Net income for the third quarter was C$91.7 million or C$0.42 per common share, down from C$126.4 million or C$0.58 per share in Q3 2006. Excluding non-operating items, net income for both periods would be C$86.2 million and C$63.9 million respectively.
Free cash flow for the quarter was C$103.6 million compared to C$96.5 million for the same period last year on the increase in service operating income. The company noted that the rise came despite an increase in capital spending over that period of C$27.7m.
The company said its projection of free cash flow in excess of C$310m for the fiscal year 2007 remains intact. CEO Jim Shaw said the company plans to accelerate capital spending in the final quarter and continue that plan into fiscal 2008. The company’s preliminary forecast for 2008 capital investment is in the range of C$640 million to C$670 million.