Shaw Communications (SJR) Reports Q1 EPS of Cdn$0.31 on Revenues of Cdn$1.37B

Shaw Communications (NYSE: SJR) reported Q1 EPS of Cdn$0.31, versus Cdn$0.31 reported last year. Revenue for the quarter came in at Cdn$1.37 billion, versus Cdn$1.383 billion reported last year.

“Since our entry into the wireless business almost five years ago, our strategy has been focused on scaling our Wireless subscriber base and improving the overall customer experience. Throughout this period, we have made significant investments that have enabled us to be innovative and disruptive, while providing tremendous value for Canadians, particularly as we continue to face uncertainties from the ongoing COVID-19 pandemic. In this environment, we have demonstrated our flexible and nimble approach with our go-to-market strategies and strong execution. Connectivity matters more than ever, and our Shaw Mobile bundling strategy is a powerful combination of high quality, affordable wireless services with our robust Fibre+ Internet offering which is clearly resonating with our Internet customers. Our bundling initiatives, combined with a sharp focus on effective cost management across our entire organization, delivered record Wireless customers and a Wireline adjusted EBITDA margin that exceeded 50% in the quarter,” said Brad Shaw, Executive Chair & Chief Executive Officer.

The Company achieved record Wireless subscriber growth in the first quarter with approximately 101,000 new Wireless customers, including 87,300 postpaid net additions and 13,700 prepaid net additions, and continued growth in Wireless service revenue of approximately 10% year-over-year. First quarter ARPU3 decreased by approximately 1.3% as the Company executes on its bundled growth strategy through the acquisition of lower revenue Shaw Mobile customers. Continued aggressive price competition, primarily impacting the Freedom Mobile brand, caused postpaid churn3 to increase in the first quarter to 1.81% compared to 1.50% a year ago. Since the launch of Shaw Mobile on July 30, 2020, the Company continues to expand its premium retail experience to more communities and advance its digital capabilities to serve its customers safely and effectively. During the first quarter, the Company opened five additional Shaw-branded retail locations in new communities throughout British Columbia and Alberta, bringing the total number of wireless retail locations offering Shaw Mobile to approximately 150 stores.

In Wireline, the Company remained focused on profitable customer interactions, building awareness for its Shaw Mobile bundle, and implementing further broadband product and distribution enhancements. First quarter Consumer Internet RGUs3 declined by approximately 15,100 as strong early demand for Shaw Mobile was driven primarily by existing Shaw Internet subscribers, combined with continued lower Internet sales activity due to the COVID-19 environment. The competitive environment continues to be robust and the Company’s efforts are on securing the connectivity needs of the household through its bundling initiatives instead of aggressive discounts on stand-alone products.

Since May 2020, the Company has expanded its portfolio of Internet products and more than doubled the top speed Internet tier, providing more choice for its customers. Following the launch of Fibre+ Gig Internet in the spring, the Company launched Fibre+ Gig 1.5 in early November, a premium Internet tier that delivers the speed and capacity needed for data-heavy customers. Since the launch of faster Internet speeds, combined with the Shaw Mobile bundle, a greater portion of new and existing Shaw Internet customers are choosing Fibre+ Gig plans. The Company also secured approximately 50 additional Internet retail locations through its existing relationships with national third-party retailers.

During the quarter Wireline revenue remained stable with Consumer decreasing 1.4% to $911 million and Business revenue increasing 1.4% to $145 million compared to the prior year. Wireline adjusted EBITDA increased 2.9% and adjusted EBITDA margin increased 190-basis points to 50.4% due to proactive base management and strong cost discipline, partially offset by lower Consumer revenue.

Mr. Shaw continued, “We have successfully navigated the last ten months of pandemic-related challenges, including the launch of Shaw Mobile, providing a strong bundled value proposition for customers and we are proud of the strength of our facilities-based networks, which are not just the core of our digital infrastructure – they are the backbone of our social and economic well-being. While there has been positive news related to the potential efficacy and the timeframe for availability of COVID-19 vaccines in our country, we are still faced with a period of uncertainty, particularly the impacts regarding the most recent restrictions on several areas of our business. However, we continue to believe that connectivity is critical and we remain focused on growing our bundled customers and effectively managing costs in this environment.”

For earnings history and earnings-related data on Shaw Communications (SJR) click here.

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