Shaw suspends share buybacks due to economic uncertainty over COVID-19 impact – Business News

0
37


Shaw Communications executives said Thursday that Freedom Mobile service would not meet its 2020 target for subscriber growth as the COVID-19 crisis kept stores closed and customers distracted, but said the loss of revenue will be offset by the drop in operating costs over the next few months.

The comments came during a conference call to discuss the Calgary company’s second quarter results, which ended on February 29, just before the official declaration of a global pandemic and measures of social distancing without previous designed to slow and reduce the spread of the new coronavirus.

The quarter also ended before Saudi Arabia launched a global price war that brought down the price of crude oil, an important source of income for Shaw customers.

“While we are generally very comfortable being able to manage this crisis, it is difficult, if not impossible, to accurately or accurately predict the impacts on Shaw,” CFO Trevor English told analysts.

Like other businesses across Canada, Shaw and Freedom have closed their retail stores in response to formal requests to avoid or limit activities that could spread the virus to the community through personal contact.

English stated that Freedom customers “simply did not make a decision to change or modify their services during this period” and Shaw expects its wireline business to also experience “significantly dampened” activity for “some period ”.

He stated that some of Shaw’s commercial and residential customers may choose cheaper plans or reduce certain services due to “increased difficulty for some customers to pay their bills”.

However, English said the revenue losses would be manageable given Shaw’s financial strength and the importance of its communications and entertainment services while most Canadians do their work and study at home.

The company has said it will conserve cash by suspending a share buyback program that cost Shaw about $ 130 million at the end of March, but will continue to maintain its dividend payments to shareholders.

During the second fiscal quarter ended February 29, net income, revenues and free cash flow increased compared to the previous year.

Net profit was $ 167 million, or 32 cents per share, up from $ 154 million or 30 cents per share; Revenues increased 3.7% to $ 1.36 billion from $ 1.32 billion. And free cash flow, which is the amount of free cash after servicing short-term debt securities, increased 20% to $ 191 million.

LEAVE A REPLY

Please enter your comment!
Please enter your name here