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TELUS reports operational and financial results for fourth quarter 2023; announces 2024 financial targets

Press Release

Industry-leading total Mobile and Fixed customer growth of 404,000, up 103,000 over last year, and our strongest fourth quarter on record, driven by continued robust demand for our unmatched portfolio of bundled products and services, and powered by a team member culture focused on delivering exceptional customer experiences over our globally leading networks

Strong Mobile Phone net additions of 126,000, our best fourth quarter since 2011, surpassing ten million mobile phone subscriber milestone; All-time quarterly record for Connected Device net additions of 203,000

Robust Fixed customer net additions of 75,000, including 36,000 internet customer additions, powered by our leading product portfolio in combination with TELUS’ expansive PureFibre network

Record high Mobility and Fixed customer additions of 1,266,000 for the full year, surpassing previous record high achieved in 2022 by 223,000, and the second straight year of net additions above the one million milestone

Strong quarterly financial results including Operating Revenues and Adjusted EBITDA growth of 2.6 per cent and 9.4 per cent, respectively, Net income higher by 17 per cent

Delivered full year Consolidated Operating Revenues growth of 9.4 per cent, surpassing $20 billion milestone, and Adjusted EBITDA growth of 7.6 per cent, respectively; Free Cash Flow of approximately $1.8 billion, up 38 per cent for 2023 and exceeding our updated annual target; Net income lower by 50 per cent in 2023 due to higher efficiency-related restructuring costs, depreciation and amortization from acquisitions, and financing costs

Targeting 2024 TTech Operating Revenues and Adjusted EBITDA to increase by 2 to 4 per cent and 5.5 to 7.5 per cent, respectively; Consolidated Operating Revenues and Adjusted EBITDA expected to grow at similar rates approximate to our TTech outlook; Stable Consolidated Capital Expenditures of approximately $2.6 billion; And strong Consolidated Free Cash Flow growth of circa 30 per cent to approximately $2.3 billion in 2024, supporting balance sheet strength and continued deleveraging along with our industry-leading dividend growth program

VANCOUVER, BC, Feb. 9, 2024- TELUS Corporation (TSX: T) (NYSE: TU) today released its unaudited results for the fourth quarter of 2023. Consolidated operating revenues and other income increased by 2.8 per cent over the same period a year ago to $5.2 billion. This growth was driven by higher service revenues in our two reportable segments: TELUS technology solutions (TTech) and Digitally-led customer experiences – TELUS International (DLCX). TTech service revenue growth was driven by: (i) higher mobile network revenues attributable to subscriber and moderating roaming revenue growth; (ii) an increase in fixed data service revenues, resulting from subscriber growth and higher, albeit moderating, revenue per internet customer; and (iii) growth in health services revenues. These factors were partly offset by lower TV and fixed legacy voice services revenues, primarily due to technological substitution, as well as macroeconomic and competitive pressures impacting consumer purchasing decisions across various products. Higher DLCX operating revenues resulted from expanded services for certain existing clients and growth from new clients, including new clients from our acquisition of WillowTree on January 3, 2023, and favourable foreign exchange impacts, which collectively more than offset the impact of some DLCX clients managing their own costs thus reducing our revenue. See Fourth Quarter 2023 Operating Highlights within this news release for a discussion on TTech and DLCX results.

“Throughout 2023, our team successfully navigated a highly competitive industry, overcame a challenging macroeconomic landscape and a dynamic regulatory environment, to achieve strong financial and operational results across our business. Indeed, our results for the year demonstrate execution strength in our TTech business segment, characterized by the potent combination of leading customer growth, complemented by strong operational and financial results, and enhanced by our significant and ongoing focus on cost efficiency. These results were buttressed by improving and resilient fourth quarter profitability from our DLCX segment, despite the continued challenging macroeconomic operating environment faced by TELUS International,” said Darren Entwistle, President and CEO. “Robust performance in our core telecom business is underpinned by our globally leading broadband networks and superior customers-first culture. This enabled our strongest fourth quarter customer growth on record, with total net additions of 404,000, up 34 per cent, year-over-year, driven by strong demand for our leading portfolio of bundled services across Mobility and Fixed services. The fourth quarter capped off a record setting year for customer net additions of 1,266,000, surpassing our previous record high in 2022 by more than 21 per cent, and marked the second consecutive year our team delivered more than one million new customer additions. These strong results included robust Fixed subscriber growth of 259,000; our highest Mobile Phone net additions since 2010 with 443,000 net new customers; and all-time record connected device net additions of 564,000. TELUS’ industry-leading growth reflects the consistent potency of our operational execution, and our unmatched bundled product offerings across Mobile and Home. Our team’s passion for delivering customer service excellence contributed to continued strong loyalty across our key product lines, once again this quarter. Notably, postpaid mobile phone churn of 0.87 per cent for the full year marks the tenth consecutive year at less than one per cent.”

“Today, TI reported its fourth quarter and full-year 2023 results that featured solid revenue growth, notwithstanding a continued challenging operating environment. Importantly, TI delivered on its commitment to improve profitability in the second half of the year, exiting the year with a strong margin profile more aligned with its historical trends,” continued Darren. “Our synergistic relationship offered meaningful support for TI’s business, alongside momentum fuelled by the AI solutions that TI provides to companies like Google, its second largest client, offsetting an otherwise softer demand environment. The improvement in TI’s profitability also reflected meaningful cost efficiency efforts implemented during the year, realigning its cost base to better meet the near-term demand environment. Over the long-term, TI remains an exciting growth story, with meaningful opportunities driven by digital transformation, underpinned by robust AI capabilities.”

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