Telus Corp ((TSE:T)) has held its Q4 earnings call. Read on for the main highlights of the call.
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In the latest earnings call, TELUS Corp showcased a strong performance with positive developments in customer growth and EBITDA, particularly in its Health and Agriculture segments. However, the overall sentiment was slightly tempered by challenges such as a decline in mobile ARPU and increased financing costs. The company remains optimistic about leveraging its robust asset base for future growth.
Record Customer Additions
TELUS achieved an impressive milestone with over 1.2 million net new customer additions in 2024, marking the third consecutive year of surpassing 1 million additions. This achievement underscores the company’s strong market presence and ability to attract new customers consistently.
Strong EBITDA Growth
TTech’s EBITDA experienced a notable growth of 7% in Q4 2024 and 5.5% for the entire year, aligning with the target range set at the beginning of the year. This growth reflects the company’s effective strategies in enhancing operational efficiencies and expanding its market reach.
TELUS Health and Agriculture Growth
The Health and Agriculture sectors stood out with remarkable growth figures. TELUS Health reported a 10% revenue growth and a 20% increase in EBITDA for Q4, while TELUS Agriculture & Consumer Goods saw a 16% rise in revenue. These segments are crucial growth engines for the company.
Improved Capital Efficiency
TELUS demonstrated improved capital efficiency with a reduction in consolidated capital intensity by 200 basis points year-over-year to 12%. This improvement is attributed to a planned slowdown in fiber and wireless asset builds, showcasing a strategic focus on capital management.
Decline in Mobile Phone ARPU
Despite overall positive results, the company faced a 3.6% decline in mobile phone ARPU in Q4 2024, highlighting ongoing competitive pressures in the telecom market. This decline indicates the challenges TELUS faces in maintaining pricing power in a competitive landscape.
Higher Financing Costs
TELUS’s net income was partially impacted by higher financing costs, resulting from increased long-term debt and rising interest rates. This reflects the broader economic environment’s influence on the company’s financial metrics.
Slight Miss on Free Cash Flow Target
The company reported a full-year free cash flow of approximately $2 billion, slightly below the $2.1 billion target. This shortfall was primarily due to higher-than-expected cash impacts of contract assets and device financing.
Forward-Looking Guidance
For 2025, TELUS has set ambitious financial goals, including a TTech operating revenue growth of 2% to 4% and adjusted EBITDA growth of 3% to 5%. The company plans to moderate capital expenditures to around $2.5 billion and aims to achieve a consolidated free cash flow of approximately $2.15 billion. Strategic focuses include operational excellence, expanding the customer base, and leveraging growth in Health and Agriculture sectors to support long-term profitable growth.
In conclusion, the earnings call highlighted TELUS Corp’s strong customer and EBITDA growth, with particular success in Health and Agriculture. While challenges like declining mobile ARPU and higher financing costs persist, the company remains focused on strategic growth and operational excellence. TELUS’s forward-looking guidance underscores its commitment to sustaining growth and improving shareholder value.
