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Aliant's Second Quarter Results
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Location: Blogs News |
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| Posted by: ITNovaScotia Admin |
Thursday, July 27, 2006 |
Atlantic Canada - July 27, 2006 - Bell Aliant Regional Communications Inc. (Bell Aliant) today announced the financial results of its predecessor, Aliant Inc., for the quarter ended June 30, 2006. Consolidated revenues were up 3.7 per cent, on a quarterly basis, to $534.3 million compared to last year and net income was up 6.9 per cent to $53.2 million for the same period. Earnings per share for the second quarter were $0.40, up 11.1 per cent over the same period last year.
Revenues of the telecommunications segment were up 4.0 per cent compared to the same quarter last year. Internet revenues grew 20.0 per cent in the second quarter compared to the same quarter last year and were driven by high-speed Internet customer growth of 36.0 per cent, attained largely through successful marketing campaigns like the PC Purchase program. Wireless revenues for the quarter grew 15.4 per cent year-over-year, as the customer base grew 13.6 per cent and net activations were up 38.3 per cent to 27,440 from the same quarter last year. Revenues from sales to external customers from the information technology segment of the business were relatively flat compared to the second quarter last year.
"Aliant's second quarter results provide us with a solid foundation to transition to the new income trust structure," said Glen LeBlanc former Chief Financial Officer (CFO) of Aliant Inc. and CFO of Bell Aliant. "Aliant's financial performance continues to demonstrate the strength required to deliver stable and predictable cash distributions to unit holders under the new structure."
Aliant's second quarter consolidated expenses of $366.8 million (excluding cost of operating revenues) were up 4.4 per cent over the same period last year due to certain restructuring costs incurred outside of the trust conversion process, which were expensed in the period. Absent these restructuring costs, expense growth was 3.9 per cent. The cost of operating revenues rose 4.3 per cent for the quarter compared to 2005, consistent with growth in product sales. The impact of the increase in operating expenses on net income was partially mitigated by lower interest expense compared to the same period last year.
Second Quarter and Six Months Financial Highlights
On July 7, 2006, Aliant and BCE Inc. created Bell Aliant Regional Communications Income Fund ("Fund") (TSX: BA.UN) by combining Aliant's wireline telecommunications operations in Atlantic Canada, information technology operation and other operations with Bell Canada's wireline telecommunications operations in its regional territories in Ontario and Quebec and its indirect 63.4 per cent interest in NorthernTel, Limited Partnership and Telebec, Limited Partnership. As part of the transaction, Aliant's wireless telecommunications operation and its ownership of DownEast Ltd. has been transferred to Bell Canada. The Fund, which has 3.4 million local access lines and over 400,000 high-speed Internet subscribers in the Atlantic Provinces, Ontario and Quebec, is headquartered in Atlantic Canada.
The financial information discussed in this news release relates to the Aliant Inc. operations for its second quarter. When the financial results of Aliant for this quarter are combined with those of the other operations of Bell Aliant and reflection is made for the plan of arrangement transactions on a pro forma basis, the resulting combined results are expected to differ materially from these results for Aliant.
We are also reporting for tax purposes, the fair market value of Aliant common shares as of the July 7, 2006 income trust conversion date that may be used to calculate a shareholder's proceeds of disposition received on the exchange of their Aliant shares for Fund units. This value also represents the adjusted cost base (i.e. tax cost) of the Fund units received by, or sold on behalf of, a shareholder at the time of the share/unit exchange. We have estimated that the fair market value of Aliant common shares at the time of income trust conversion was $33.36 per share. While Canadian tax authorities do not provide any specific methodology for determining the value of the Aliant common shares disposed of, or for determining the tax cost of the Fund units received, Aliant has used for its own purposes, a five day volume weighted average trading price for the days leading up to the trust conversion as an indication of such value. Aliant cannot provide assurances that Canadian tax authorities will agree with the use of such a valuation method and shareholders are advised to consult their own tax specialist for advice.
Analyst conference call
A conference call is scheduled for Friday, July 28, 2006 at 9:30 a.m. (ET), (10:30 a.m. Atlantic, 11:00 a.m. NL). The dial in number is (416) 695-6120 or (877) 789-0150. Media are invited to attend in a listen-only mode. The title of the call is "Aliant Second Quarter 2006 Financial Results." A replay of the session can be heard from July 28 at 11:00 a.m. (ET) to August 4 at midnight (ET). To access the replay, dial (416) 695-5275 or (888) 509-0081 and enter the pass code 628072.
A live audio webcast of the conference call can be accessed on: www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1546380. A rebroadcast of the conference call will be available on the website for approximately 90 days. A pass code is not required for the webcast.
Forward-looking Statements
This news release contains forward-looking statements concerning anticipated future events, results, circumstances or expectations. Unless otherwise indicated, such forward-looking statements describe our expectations at July 27, 2006. These statements are based on management's beliefs regarding future events, many of which, by their nature are inherently uncertain and beyond management's control. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties which are difficult to predict and assumptions which may prove to be inaccurate. Some of the factors that could cause results or events to differ materially from current expectations include but are not limited to: general economic conditions; stock market volatility; market or business conditions; the changing competitive environment; changing regulatory conditions or requirements; changing technology; changing discount rates and market returns on pension plan investments; our ability to achieve strategies and plans; our success in implementing productivity initiatives; our success in integrating the businesses that combined to form Bell Aliant; unforeseen changes in relationships with important stakeholders. Please refer to Aliant's Management Information Circular dated April 14, 2006 (including Forward-Looking Information on page 39) for a discussion of the key assumptions and risk factors relating to the income trust arrangement. Except as may be required by applicable law, we disclaim any intention and assume no obligation to update or revise any forward-looking statement even if new information becomes available, as a result of future events or for any other reason. Readers should not place undue reliance on any forward-looking statements.
 Management's Discussion and Analysis
Financial Statements and Notes
Supplemental Investor Information
For more information contact:
Media Relations:
Kelly Gallant
(902) 487-4642
kelly.gallant@aliant.ca
Investor Relations:
Ian Chadsey
(506) 647-9597
ian.chadsey@aliant.ca |
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