Telus Sparkles With Strong Customer Growth In Q3, Dividend Climbs In Strategic Cost-Cutting Push

Telus Corp TU reported third-quarter FY23 operating revenues and other income growth of 7.2% year-over-year to C$5.01 billion ($3.73 billion).

The management stated that the revenue growth was driven by higher volumes and the ramp-up of projects across key clients, notably within TI AI Data Solutions.

TELUS Health business unit reported Q3 revenues of $422 million, alongside 20% EBITDA growth, normalizing for LifeWorks.

Total telecom subscriber connections grew 7.2% Y/Y to 18.94 million.

The company made 406,000 new customer net additions in the quarter, up 17% over last year, including 160,000 mobile phones, 179,000 connected devices, and 35,000 internet connections. 

The mobile phone churn rate was 1% For Q3 compared to 0.95% in the 3Q22.

Adjusted EPS was C$0.25 ($0.19), down from C$0.34 a year ago.

Adjusted EBITDA increased by 5.5% Y/Y to C$1.82 billion. 

The company generated C$1.31 billion in operating cash flow for the quarter, compared to $1.3 billion a year ago. Free cash flow was C$355 million.

Dividend Increased: TU’s Board declared a quarterly dividend of $0.3761 per share, payable on Jan. 2, 2024, to holders of record at the close of business on Dec. 11, 2023. The quarterly dividend reflects an increase of 7.1% from the $0.3511 per share dividend declared one year earlier.

“During the third quarter, we continued to execute against our cost efficiency program, across our business, as outlined with the release of our second quarter results in August. While these efforts will continue into the fourth quarter of 2023 and into early 2024, this significant program will drive permanent cost reductions across our organization, supporting our growth profile and cash flow generation, as well as our dividend growth program and balance sheet deleveraging,” said Doug French, executive vice-president, and CFO.

FY23 Outlook reaffirmed: Telus expects operating revenue growth of 9.5%-11.5%, Adjusted EBITDA growth of 7%-8%, and Free cash flow of ~1.5 billion.

Price Action: TU shares were trading higher by 2.6% at $17.69 at the last check Friday.

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