TELUS (TU, Financial) has announced a substantial investment exceeding $70 billion over the next five years aimed at extending and upgrading its network infrastructure and operational capabilities throughout Canada. This initiative is designed to bolster the country's economic resilience during challenging times by attracting further investments and fostering nationwide growth. It promises to drive domestic innovation and enhance the prosperity of both urban and rural areas across Canada. This new commitment is an extension of TELUS's longstanding dedication to economic development, having previously invested more than $276 billion since 2000 to enhance productivity and support the nation's economic infrastructure.
TU Key Business Developments
Release Date: May 09, 2025
- Total Mobile and Fixed Customer Growth: 218,000 net additions, the strongest first quarter on record.
- Postpaid Mobile Phone Churn: 0.84%, a 6 basis points improvement over last year.
- TTech EBITDA Growth: 4% increase.
- Mobile Net Additions: 168,000 total, including 20,000 mobile phone net additions and 148,000 connected device net additions.
- Fixed Customer Additions: 50,000 net additions.
- Fixed Data Services Revenue Growth: 3% year over year.
- TELUS Health Revenue and EBITDA Growth: 12% and 30%, respectively.
- Global Lives Covered by TELUS Health: Increased by 7% year over year to 76.5 million.
- Annualized Synergies from LifeWorks Acquisition: $376 million, including $306 million from cost efficiencies and $70 million from cross-selling strategies.
- TELUS Agriculture and Consumer Goods Revenue Growth: 20% year over year.
- Free Cash Flow Growth: 22.3% increase this quarter.
- Dividend Increase: 7% increase, with a target of 3% to 8% annual growth from 2026 through 2028.
- Net Debt to EBITDA Ratio Target: Circa 3 times by 2027.
- Mobile Network Revenue: Slight decline due to a 3.7% decrease in ARPU.
- TTech Operating Revenues: Up 2%, driven by higher mobile equipment revenue and fixed data services.
- TTech Adjusted EBITDA (excluding health): Increased 3% with a margin expansion of 30 basis points to 42.4%.
- Consolidated Capital Expenditures: Declined by 19% or $132 million.
- Quarterly Free Cash Flow: $48 million, a 22% increase.
- Long-term Debt Average Term to Maturity: Over 10 years with a weighted average cost of 4.4%.
- Leverage: Elevated at 3.9 times, with a plan to reduce to 3 times by 2027.
- Proceeds from Non-core Asset Monetization: $66 million.
- Hybrid Debt Securities Raised: $1.6 billion, with 50% receiving equity treatment.
- Workplace Options Acquisition: Approximately $500 million net of assumed debt.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- TELUS Corp (TU, Financial) achieved industry-best total mobile and fixed customer growth with 218,000 net additions, marking the strongest first quarter on record.
- The company reported a 4% growth in TTech EBITDA, supported by strong mobile net additions and record Q1 connected device net additions.
- TELUS Health segment showed impressive momentum with revenue and EBITDA growth of 12% and 30%, respectively, driven by global expansion and product enhancements.
- The acquisition of Workplace Options expanded TELUS Health's reach to over 160 million lives covered globally, enhancing its comprehensive suite of health and well-being solutions.
- TELUS Corp (TU) announced a 7% dividend increase, reflecting its commitment to delivering superior value to shareholders and extending its dividend growth program through 2028.
Negative Points
- Mobile network revenue declined slightly due to a 3.7% decrease in ARPU, reflecting ongoing competitive pressures and lower roaming.
- The wireless service revenue showed a decline, with ARPU under pressure, indicating challenges in balancing volume versus pricing in the competitive market.
- Leverage remains elevated at 3.9 times, although TELUS Corp (TU) is committed to improving its leverage ratio to 3 times by 2027.
- The company faces challenges in scaling its IoT and machine-to-machine business, particularly in health and agriculture sectors.
- TELUS Corp (TU) continues to operate with a Dividend Reinvestment Plan (DRIP) discount, which may cause dilution to shareholders until it is fully removed by 2027.
