Vancouver-based telecom company Telus (TSX:T) has boosted its quarterly dividend by over 10 per cent as it reported third quarter profit rose 7.7 per cent while operating revenue also grew.
The company said it is increasing its quarterly dividend by 3 cents to 64 cents, and also stood by its annual forecast for this year.
For the three months that ended September 30, net profit was $351 million, or $1.07 per diluted share, compared to earnings of $326 million, or $1.00 per share, in the same period last year.
Operating revenue rose by almost 6 per cent to $2.77 billion. The company said growth was seen mainly because of a seven per cent increase in wireless revenue and a 12 per cent rise in wireless earnings before interest, taxes, depreciation and amortization (EBITDA).
This resulted from a 23 per cent rise in data revenue to $546 million due to continued smartphone and tablet adoption.
Data average revenue per user (ARPU) increased by $3.61 or 17 per cent to $24.51, helped by an increase in smartphones and related data plans, higher roaming volumes, growth in mobile Internet devices and tablets, and increased revenues from text messaging.
Wireline revenue rose 4 per cent as well, due to a 14 per cent boost in data revenue driven by “strong TV and high speed internet growth”, Telus said.
Its total customer base of 13 million grew, with the addition of 116,000 new postpaid, or contract, wireless customers in the latest period, as well as 42,000 new TV subscribers and 26,000 internet customers.
The company said this growth was somewhat offset by a loss of 39,000 in its traditional land line business.
Postpaid net additions, which declined by 13 per cent from a year ago, were impacted by delayed customer purchase decisions ahead of the anticipated launch of the new iPhone 5 in late September.
Its total wireless subscriber base still grew 5 per cent year-over-year to 7.6 million, with blended average revenue per unit, which includes both data and voice ARPU, up 1.5 per cent.
It said smartphone subscribers now make up 63 per cent of the total postpaid subscriber base of 6.4 million, as compared to 48 per cent a year ago.
The Telus TV subscriber base of 637,000 is up 41 per cent, and the internet customer base is up 7 per cent to 1.3 million.
“Our long-standing strategy to invest in broadband wireless and wireline data technology, services and applications within our core businesses coupled with a focus on putting customers first has resulted in strong quarterly operational and financial growth,” said Darren Entwistle, Telus president and CEO.
Also Friday, Telus announced that CFO Robert McFarlane plans to retire at the end of the year, and is to be replaced by John Gossling, former CFO of CTV Globemedia, on January 1, 2013. A transition period is scheduled to begin when Gossling joins the company on November 12.
Entwistle also said that he plans to take all of his next year cash salary in the company’s common shares.
The company’s share structure has been the subject of a protracted proxy dispute between itself and Telus’ largest shareholder, US hedge fund Mason Capital Management.
In the middle of last month, Telus won the first round when its shareholders voted to approve its share consolidation proposal to exchange non-voting shares for voting stock, on a one-for-one- basis.
Mason is appealing the decision in court, with hearings having begun on Wednesday at the Supreme Court of British Columbia.
The company has a wireless churn rate, or the rate at which customers cancel services, of 1.44 per cent – which Entwistle called “industry-leading”.
Telus recently announced that it will no longer charge a $35 activation fee for new customers or a $25 equipment exchange fee for renewing customers who purchase a new device.