Shaw Q4 2022 Sees Profit Drop 33%; Nearly 53,000 Wireless Customers Added

Shaw Communications on Tuesday announced consolidated financial and operating results for its fiscal quarter and year ended August 31, 2022.

The company reported consolidated revenue of $1.36 billion for the quarter, down 1.5% year-over-year. This includes $325 million in earnings from the Wireless segment as a whole, up 1.2%.

Adjusted EBITDA for the period dropped 1.6% to $624 million, while cash flow from operations slumped 5.3% to $487 million. Shaw’s net income took the biggest hit in Q4, declining a whopping 32.9% to $169 million.

During the fourth quarter, Shaw added a total of 52,900 net new wireless customers. Postpaid net additions were approximately 25,600, down slightly year-over-year due to wireless competition and lower demand for Shaw Mobile. Shaw’s wireless service revenue grew 7.3% to $250 million during the period thanks to continued subscriber growth.

For fiscal 2022 as a whole, Shaw reported $5.45 billion in consolidated revenue from all of its segments, down 1.1% year-over-year, and a 1.4% increase in adjusted EBITDA to $2.53 billion. Wireless revenue for the twelve-month period was $1.29 billion, up 1.5% from the previous year.

While Shaw saw revenue from its Consumer Internet, Wireless service, and Business segments grow during the year, earnings from the Wireless equipment and Wireline Video, Satellite, and Phone segments dipped.

Shaw ended the quarter with a free cash flow of $70 million, down significantly from $227 million in the same period last year because of higher capital expenditures and higher income taxes paid. Free cash flow for fiscal 2022 was $819 million, 15.8% lower than fiscal 2021.

“As Canadians put the COVID-19 pandemic behind them, the need to connect, and stay connected, has remained strong. The Canadian and global communications sectors – both wireline and wireless – face important and rapidly escalating investment demands where ongoing investments today determine our competitiveness tomorrow,” said Brad Shaw, Executive Chair and CEO of Shaw Communications.

“That is true for our networks, and also for our country. All Canadians depend on our industry to make the necessary investments so that they can benefit from technology advances and all the opportunities afforded by our digital economy.”

Shaw also provided shareholders with an update on the status of Rogers’s proposed $26 billion takeover of the company, which is currently being contested before a federal tribunal by the Competition Bureau. Earlier this month, Rogers reported a 24% decrease in net income for the third quarter ending September 30, 2022.

Testifying before the Competition Tribunal last week, Bradley Shaw said the decision to sell the company to Rogers was “extremely difficult” for the Shaw family. Tribunal hearings to determine the fate of the Rogers-Shaw deal will last four weeks, with oral arguments scheduled for mid-December.

A decision from the three-member panel overseeing the proceedings is expected in January. Rogers and Shaw previously extended their mutual merger deadline to December 31, 2022, hoping to close the deal by that time. However, the telcos have room for a further extension up to January 31, 2023.

If the Rogers deal does not close, Shaw expects to hold its 2023 Annual General Meeting in April 2023.