TELUS Corporation today released its unaudited results for the third quarter of 2018. For the quarter, the operator consolidated operating revenue of $3.8 billion increased by 11 per cent over the same period a year ago.
This growth was driven by higher wireless network and equipment revenues, wireline services revenue growth and higher other operating income resulting from our share of the non-recurring equity income related to real estate joint ventures of $171 million arising from the sale of TELUS Garden. Excluding this equity income consolidated operating revenue increased by 5.8 per cent.
Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased by 8.2 per cent to $1.3 billion due to higher revenue growth as referenced above and improved wireless equipment margins.
This growth was partly offset by incremental employee benefits expense due to recent business acquisitions and increased costs to support our growing customer base. Adjusted EBITDA was up 6.4 per cent when excluding the net gain from the sale of TELUS Garden, as well as restructuring and other costs, which included our committed donation of $118 million to the TELUS Friendly Future Foundation.
“TELUS reported strong operational and financial results for the third quarter, including robust customer growth across both the wireless and wireline segments of our business. This was buttressed by a continued excellent performance in wireless and wireline customer loyalty and lifetime revenue,” said Darren Entwistle, President and CEO. “Importantly, the TELUS team continues to achieve industry-leading postpaid wireless churn, and realized record third quarter high-speed Internet and TV retention levels. This performance was driven by our team’s relentless focus on providing exceptional customer experiences, and was anchored by the ongoing generational investments we are making in our leading broadband wireline and wireless networks, both of which are hallmarks of TELUS’ successful, long-term growth strategy.”
Mr. Entwistle added, “The efficacy of our broadband technology investments is reflected in TELUS, once again, being named as having the fastest mobile network in Canada by PCMag. This repeat acknowledgement builds on our outstanding record of achievement with respect to network excellence, having already earned the top spot in all major mobile networks reporting this year, including Ookla, J.D. Power and OpenSignal. These leading network rankings, each received consecutively for two or more years, reinforce the consistent superiority of TELUS’ broadband networks available to citizens across the country.
Mr. Entwistle further commented, “Our dividend increase announced today, on the back of our 41 per cent free cash flow growth, reflects the sixteenth increase since 2011, and is the fourth in our most recent three-year dividend growth program, targeting annual growth between seven and 10 per cent through 2019. This builds on our proven track record of providing investors with the industry’s best multi-year dividend growth program, which continues to generate significant value for our shareholders. Notably, TELUS has now returned $16 billion to shareholders, including $10.8 billion in dividends, representing $27 per share since 2004. We look forward to updating investors on the progression of this program at our 2019 annual general meeting.”
Doug French, Executive Vice-president and CFO said, “For the third quarter of 2018, TELUS delivered positive operational and financial results, reflecting the strength of our multiple product and valued service offerings, our commitment to customer service excellence and our network superiority. Our strategic capital investments are clearly paying off, as evidenced by our strong subscriber and loyalty results, and position us to maintain our network leadership as we progressively move towards the arrival of 5G.”
Mr. French added, “As we head into the seasonally important final quarter of 2018, we remain focused on executing against our strategy, amplifying our efforts on cost efficiency, focusing on margin accretive customer growth and investing to support our growth strategy. Today we are raising our full year 2018 assumption for restructuring and other costs, including an additional $50 million targeted towards further streamlining our business and enhancing our effectiveness in serving our growing customer base. This additional investment in restructuring, to be recorded in the fourth quarter of 2018, is expected to deliver annual cost savings of more than $50 million beginning next year. Meanwhile, our net debt to EBITDA leverage ratio continues to improve, putting us in good position for 2019.”