Telus reports rise in profit, revenue

Vancouver telecom’s second-quarter earnings amounted to 34 cents a share, up from 25 cents a share

Telus Corp. boosted its secondquarter profit and revenue as it added new mobile phone, internet and television customers and benefited from growth in its technology-oriented businesses.

The Vancouver-based telecom generated $4.4-billion in revenue during the quarter, up 7.1 per cent from a year ago when it had $4.1-billion revenue.

Its profit for the three-month period ended June 30 was $498million, up 44.8 per cent from $344-million during the same period last year. The earnings amounted to 34 cents per share, up from 25 cents per share.

After adjusting for restructuring costs, income tax and other items, the telecom had $422-million in profit, up 21.3 per cent from $348-million a year ago. The adjusted earnings amounted to 32 cents per share, up from 26 cents per share.

Analysts had been expecting adjusted earnings of 29 cents per share and revenue of $4.44-billion, according to the consensus estimate from S&P Capital IQ.

Telus added 93,000 net new mobile phone customers, 34,000 net new internet subscribers and 15,000 television customers during the quarter.

Doug French, Telus’s chief financial officer, said the telecom has seen increased foot traffic through its stores but fewer phone purchases as devices are lasting longer. Wireless roaming revenues, which the company collects when customers use their cellphones abroad, have almost recovered to prepandemic levels, Mr. French said.

“On the roaming front, from a volume perspective, we’re back to almost 90 per cent of 2019 levels,” Mr. French said in an interview. “And about 103 per cent when you bring in the fact that rates have gone up a little bit from the 2019 levels,” he added.

Zainul Mawji, executive vicepresident and president of home solutions and customer excellence at Telus, said that economic conditions such as rising inflation have made customers more cost conscious.

“In these types of times, you certainly see customers look for affordability options, and in many ways, our services provide that,” Ms. Mawji said, noting that a desire for greater value can prompt customers to seek out savings by purchasing multiple services from a single telecom, a practice known in the industry as bundling. “Our services tend to be quite resilient over all,” Ms. Mawji said.

Online customer service provider Telus International, which Telus took public last year, increased its second-quarter revenue by 17 per cent to US$624million and its quarterly profit to US$56-million, up from US$16million during the same period last year.

The telecom remains on track to grow its Telus Health and Telus Agriculture subsidiaries, either by taking them public through initial public offerings or by bringing in investment partners, Mr. French said.

The company is currently awaiting regulatory approval of its $2.9-billion acquisition of human-resources company LifeWorks Inc., which will add scale to its health subsidiary.

“Assuming we get the regulatory approval, it’s going to be another opportunity for us to scale and grow Telus Health at an exponential level,” Mr. French said. “Our future opportunities to bring in partners or to go public are probably more opportunistic than ever, obviously, market conditions pending,” he added.

Scotiabank analyst Maher Yaghi said Telus’s investments in its technology and health businesses are “adding strong growth to the organization.”

“Over all, Telus is executing well in a competitive market and is gaining share in wireline as the company continues to load up its fibre network,” Mr. Yaghi said in a note to clients. (The wireline segment includes the company’s internet and television services.)

The telecom sector is facing questions regarding network reliability after a major outage last month at Rogers Communications Inc. The July 8 outage, which left millions of Rogers customers across the country without wireless, internet or home phone service, prompted Industry Minister François-Philippe Champagne to direct the country’s wireless carriers to enter into a formal mutual-assistance pact.

On Thursday, BCE Inc. CEO Mirko Bibic said his company’s network architecture prevents complete outages such as the one experienced by Rogers.

Telus CEO Darren Entwistle declined to comment on the Rogers outage during a conference call with investors on Friday. “I don’t believe … it’s the appropriate thing to do,” Mr. Entwistle said.

Ms. Mawji said Telus’s networks have redundancies built in that would make it easier for the company to contain an outage to a specific geography or service.

“You can look to examples like what we’ve experienced in Western Canada, which is different from the rest of Canada, in terms of the devastating heatwaves, fires and floods year after year, and our networks have stood up very significantly to that,” Ms. Mawji said in an interview.