Manitoba Telecom Services posts a Q2 net profit and increases revenues

WINNIPEG – Manitoba Telecom Services Inc. (TSX:MBT) reported a second-quarter profit of $28.8 million on Thursday, turning around a loss from the same quarter a year ago.

The company said the profit amounted to 37 cents per share compared with a loss of $52.9 million, or 78 cents per share, a year ago, when the company was hit by costs related to the proposed sale of its Allstream business which provides Internet and other services to businesses and governments.

Manitoba Telecom Services had signed a deal to sell Allstream to Egyptian investment group Accelero Capital for $520 million, however the deal was called off last fall after Ottawa rejected the proposal due to national security concerns under the Investment Canada Act.

Revenue in the quarter was down 1.7 per cent at $403 million compared with $410 million year-over-year.

Wireless subscriber revenues were $87.1 million, down $1.7 million from the same quarter last year, due to a more competitive market.

Internet revenues were $32.5 million, up $3.5 million year-over year. Revenues from its Internet protocol TV service were $20.9 million, up $400,00 year-over-year.

Operating revenues for Allstream were down 5.6 per cent to $161.9 million in the quarter.

“Our second-quarter performance reflects strong broadband growth at MTS and strong IP performance at Allstream,” chief executive Pierre Blouin said in a statement.

“Despite an active competitive wireless market in Manitoba over the past few months, MTS has maintained its wireless market share and delivered one of the lowest post-paid churn rates in the country while generating solid growth in subscribers.”