SaskTel reports 2013 net income of $90.1 million
SaskTel reports 2013 net income of $90.1 million
SaskTel today reported 2013 net income of $90.1 million and operating revenues of $1.2 billion, up $22.7 million from 2012. The increase in revenues are a result of significant increases in wireless ($17.6 million) and maxTV, Internet and data revenues ($16.7 million), both due to increases in customers and average revenue per user. The lower than budgeted net income was due to a decline in fair value of our sinking fund investments.
“SaskTel continues to deliver on its mandate to deliver high quality, accessible and affordable services while investing in core business operations and services within Saskatchewan,” Minister responsible for SaskTel Don McMorris said. “To succeed going forward, SaskTel will evolve and find new ways to use its networks and expertise to expand into the burgeoning Information and Communication Technology (ICT) market.”
“SaskTel had a strong financial year despite intensifying price competition in the Saskatchewan market and regulatory changes in the wireless segment that added costs and reduced revenues to the business,” SaskTel President and CEO Ron Styles said. “This will be a challenging year for SaskTel from a financial perspective as both the unintended consequences of federal policy and targeted pricing by our competitors in the Saskatchewan market will significantly impact our bottom line.”
- Net Income - $90.1 million
- Revenues - $1.2 billion
- EBITDA Margin - 24.6 per cent
- Return on Equity - 12.0 per cent
- Dividend of $81.1 million declared to Crown Investments Corporation (CIC) in 2013
- Debt ratio of 48.7 per cent
- Wireless revenues increased by $17.6 million (3.9 per cent) to $471.8 million in 2013.
- Total wireless accesses increased to 615,694 at year end, up 8,035 due to organic growth and legacy wireline customers abandoning their traditional wireline services for a wireless alternative.
- Customers continue to migrate from voice-only devices to data-capable devices such as smartphones. In 2013, the number of data-capable devices increased to 412,993, up 16.8 per cent from 353,490 in 2012.
- Adoption of data-capable devices such as smartphones, has also resulted in customer migration to more expensive and feature rich data plans, which increased the average revenue per subscriber from $62.99 in 2012 to $64.39 in 2013.
- maxTV reached a milestone in 2013, when it surpassed 100,000 customers. This customer growth, coupled with an ARPU increase of $3.57, resulted in a year over year increase in revenues of $10.0 million.
- Increases in average revenue per customer can be attributed to increases in rates to offset increase in content costs, increased adoption of high definition services, and increased penetration of digital video recorders.
Internet and Data Services
- Internet and data services revenues are up $6.7 million in 2013. Internet revenues increased $3.8 million in 2013, as customers selected faster Internet service packages (High Speed Extreme, Advanced and Ultra) and were early adopters of SaskTel’s fibre-based service infiNET™, driving an increase in average revenue per access. Growth of 4,713 (2.0 per cent) Internet accesses during the year also contributed to the growth in revenues.
Advertising and Directory Services
- Advertising and directory services revenue decreased to $42.6 million in 2013, down from $43.4 million in 2012, a decrease of $0.8 million (1.8 per cent). In an industry that continues to experience significant financial pressures, including ongoing double-digit declines in revenues, the release of Mysask411 Solutions in 2013 (a simplified, packaged approach to online, mobile and print advertising for businesses) is expected to help keep revenue retention at industry-leading levels.
Security Monitoring Services
- Security monitoring revenues increased $0.8 million to $20.7 million in 2013, due to acquired growth in customers. SaskTel continues to actively seek out business growth both organically through existing customers, and externally through customer account acquisitions.
Software Solutions and Consulting
- Software and consulting service revenues decreased to $7.3 million in 2013, down $0.6 million (7.6 per cent) from 2012, primarily due to lower sales of customized software and consulting services in 2013.
- SaskTel’s total capital expenditures for 2013 were $355.8 million, up $26.0 million from 2012.
- SaskTel’s net capital spending on property, plant and equipment in 2013 was $278.2 million, up $14.2 million from 2012, primarily due to increased spending on Fibre to the Premises (FTTP), infrastructure support, and continued enhancements to the wireless networks (4G and LTE).
- SaskTel’s net spending on intangible assets was $77.6 million, up $11.8 million from the same period in 2012, primarily due to increased spending on Wireless Delivery Environment, Martens modernization, Customer Self Serve and Field Services Efficiency software.
Corporate and Business Highlights
Significant investments on infrastructure in 2013 included:
- $69.4 million in capital expenditures on FTTP to allow more functionality on the broadband network including significantly higher download and upload speeds, as well as continued improvement in maxTV services;
- $62.9 million on continued enhancements to the wireless network to allow for increased coverage and capacity; and
- $45.5 million to provide for network growth and enhancements.
Investment in intangible assets included:
- $17.8 million to modernize the wireless billing environment. This upgrade will consolidate wireless services into one platform and allow for more effective billing and customer relationship management;
- $14.1 million on security monitoring accounts to increase the customer base and allow for greater economies of scale;
- $10.4 million on the Martens modernization project. This project will upgrade the Martens software to allow for better integration with current and future technologies as well as allow for more effective tracking of network facilities;
- $6.7 million on Customer Self Serve to enhance the customer experience when accessing SaskTel products and services; and
- $6.5 million on Field Services Efficiency program that modernized our operations work force management systems.
Awards and Recognition – 2013:
- Canada’s Top 100 Employers - 14th consecutive year
- Canada’s Greenest Employers
- Canada’s Best Diversity Employers
J.D. Power & Associates – SaskTel was ranked number one in overall customer satisfaction in the full service category for all of the major carriers
SaskTel’s full Corporate Social Responsibility Report is available online at http://sasktel.com/about-us/company-information/financial-reports/index.html.
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