Telus Corp. T-T posted flat revenue, a net income decline of 50 per cent and lower net new mobile phone subscribers in the first quarter, and announced the retirement of its chief financial officer as it goes through a leadership transition.
CFO Doug French will depart in June after 30 years with the company, and will be succeeded by Gopi Chande, currently the CFO of Telus Digital and Telus Health.
“Doug’s innumerable and important contributions to Telus’ success over the course of his outstanding career have been nothing short of extraordinary,” said Darren Entwistle, Telus president and chief executive officer.
Mr. Entwistle will also retire at the end of July after 26 years with the company, and be succeeded by former Canadian Imperial Bank of Commerce CEO and Telus board member Victor Dodig.
Mr. Entwistle, known as the industry’s longest-serving executive and a transformative leader, is departing following a period in which the company has come under fire from analysts and credit raters for its heavy debt load.
The telecom sector has faced slow revenue growth as Canada’s population growth has slowed, and greater competition on mobile phone pricing in recent years.
Analysts believe the change at the top could signal a shift in financial strategy for the company, including further asset divestitures and a possible cut to the dividend which currently carries a yield of close to 10 per cent.
The Vancouver-based company left its dividend – currently, 41 cents per share – unchanged in its first quarter. Meanwhile, Telus ended its first quarter with $26-billion in long-term debt, down $1.3-billion from the end of the previous quarter.
Revenue for the first quarter ended March 31 was $5-billion, flat compared to the same quarter last year and meeting analyst consensus.
This was the result of higher Telus Health growth, including revenue from an acquisition completed after the first quarter last year, and subscriber growth, offset by lower Telus Digital revenues, business-to-business data and legacy telephone service revenue.
Net income was $144-million, down 52 per cent from last year. The company said this was the result of the net after-tax impacts of a decline in operating income and lower financing costs.
Free cash flow increased by 19 per cent in the quarter.
When excluding certain costs and other adjustments, such as restructuring expenses and the tax effects of those costs, adjusted net income of $356-million decreased by 8 per cent over the same period last year.
The company added 12,000 net mobile phone subscribers in the quarter, down from 20,000 last year and analyst expectations of 17,000. It added 21,000 internet customers, the same as last year.
Average revenue per user, a common metric used by the industry to measure the value of a customer, for mobile phones declined by 1 per cent in the quarter.
Meanwhile, capital expenditures of $651-million were up 11 per cent, “primarily from greater capital investments in developing new facilities to meet growing industry demand,” the company said in its release.
Telus maintained its previous guidance for 2026 with a few adjustments, including projecting higher restructuring and other costs, and lower expected cash income tax payments.