Telus Slashes Dividend 55% as Q2 Losses Hit Massive $1.8 Billion

Telus just posted a $1.8 billion net loss for its second quarter, and its wireless growth is slowing too.

The loss comes almost entirely from a $2.1 billion non-cash writedown on Telus Digital, the company’s customer service and AI arm. Strip that and other one-time items out, and adjusted net income was $254 million, down 26 per cent from a year ago.

Consolidated service revenue was $4.4 billion, down 1 per cent. Total operating revenue was $4.9 billion, down from $5.1 billion.

Wireless held up better than the rest. Mobile network revenue hit $1.7 billion, up 1 per cent, helped by a bigger subscriber base. Telus now has 10.3 million mobile phone customers, up 1 per cent over the year, plus 4.8 million connected devices and 2.8 million internet subscribers.

But subscriber growth has cooled sharply. Telus added just 17,000 mobile phone customers in the quarter, down 38,000 from the same period last year. Gross additions fell to 348,000, down 28,000, which Telus says reflects a deliberate push for more profitable customers. Internet added 20,000, down 7,000. Connected devices were the bright spot at 187,000 net adds, up 75,000.

Churn, the rate at which customers left to another telecom, ticked up to 1.08 per cent from 1.06 per cent, which Telus blamed on ongoing promo pricing wars.

Another metric worth tracking is ARPU, the average monthly revenue per customer, which was at $56.36. That’s down 22 cents or 0.4 per cent year over year, though the rate of decline is easing. Telus pointed to cheaper base plans, less roaming revenue, and public sector price pressure.

Telus also cut its quarterly dividend 55 per cent, to $0.1875 per share, to pay down debt.

Reaction to the quarterly earnings sent Telus stock down 12% as of writing, to $13.24 per share (it was down as much as 14%). The company’s shares are down 40% in the past year. Telus’ new CEO Victor Dodig has some work to do to turn this ship around.