CALGARY – Shaw Communications released its first-quarter update Thursday, after two blockbuster deals that will dramatically reshape Canada’s wireless and media industries.
The Calgary-based communications giant announced in the three months ending Nov. 30, Shaw generated $1.42 billion of revenue, up 2.2 per cent from a year earlier. Net income was $218 million for the first quarter, down from $227 million in the same period last year.
The financial results were released one day after Shaw announced it is selling its Shaw Media division, comprising the Global Television Network and 19 specialty channels, to Toronto-based Corus Entertainment for $2.65-billion and it closely follows another major move in December when the company unveiled a plan to purchase Wind Mobile for $1.6-billion.
Some of the proceeds from the Shaw Media sale will be used to fund the company’s expansion into wireless and upgrade the Wind network.
“For us at Shaw Communications, we’ve got a big road ahead in entering the wireless space, becoming a pure-play connectivity company and [the Corus deal] allows us the focus to be able to deliver on a new set of experiences for our customers,” chief operating officer Jay Mehr said.
Shaw Communications would gain a 39 per cent stake in Corus if the purchase of Shaw Media is approved by regulators and shareholders.
Shaw continued to lose cable subscribers in the latest quarter but at a slower pace, the company said.
Despite a slumping economy in Western Canada, particularly in Alberta and Saskatchewan, the company said it expects to generate the same amount of cash from its cable, satellite and Internet services this year compared to last, or more.
“We’re hanging in there as you saw from today’s results – we had a very solid quarter,“ Mehr said. “But it’s real, the impact that it’s having on people’s lives on businesses in town, and we want to stand and support our customers in any way we can.”
Barring any hurdles, the deal to sell Shaw Media to Corus along with the Wind Mobile acquisition are expected to close by the end of Shaw’s fiscal third quarter, which ends May 31. Until then the company says it will continue to operate along previously announced plans.
Shaw Communications is the parent company of Global News.
With files from The Canadian Press and Global’s Sarah Offin
© 2016 Shaw Media