Shaw says it’s sticking to strategic plan despite hard times in Western Canada

CALGARY – Shaw Communications Inc. (TSX:SJR.B) says despite hard times in Western Canada, it’s making no changes to its 2016 plans and expects this year’s operating income benchmark will be flat or slightly higher than in fiscal 2015.

The Calgary-based company made the announcement with its first-quarter report Thursday, a day after it announced plans to sell Shaw Media in a $2.65-billion deal and a month after it announced plans to buy Wind Mobile for $1.6 billion.

Those deals are expected to close by the end of Shaw’s fiscal third quarter, which ends May 31, and until then the company says it will continue to operate along previously announced plans.

It continued to lose consumer “revenue generating units” — or RGUs — but at a slower pace than in the previous quarter ended Aug. 31. The 2016 first quarter showed fewer terrestrial phone, satellite video and cable video consumer customer RGUs, and a slight improvement in Internet RGUs.

In the three months ended Nov. 30, Shaw had $1.42 billion of revenue, up 2.2 per cent from a year earlier. Operating income before restructuring costs and amortization, one of Shaw’s guidance benchmarks, was $626 million, up 3.3 per cent.

Net income was $218 million or 43 cents per share, down from $227 million or 46 cents per share. Shaw said the decline was mostly because of higher taxes and amortization, which is a non-cash expense.

Free cash flow — what’s left after current debt obligations and operating expenses — was $173 million, down from $193 million for a year earlier. Shaw said the decline was due to timing of planned capital spending.

“Up against a difficult economic backdrop in Western Canada, we are pleased with our first quarter results,” Shaw chief executive Brad Shaw said in a statement.