TELUS Corporation (NYSE:
TU) Q2 2018 Results Earnings Conference Call August 3, 2018 11:00 AM ET
Executives
Darrell Rae - Director, Investor Relations
Darren Entwistle - President and Chief Executive Officer
Doug French - Chief Financial Officer
Analysts
Phillip Huang - Barclays
Simon Flannery - Morgan Stanley
Jeff Fan - Scotiabank
Aravinda Galappatthige - Canaccord Genuity
Maher Yaghi - Desjardins
Operator
Good morning, ladies and gentlemen. Welcome to the TELUS 2018 Q2 Earnings Conference Call. I would like to introduce your speaker, Mr. Darrell Rae. Please go ahead.
Darrell Rae
Good morning, everyone, and thank you for joining us today. TELUS' second quarter 2018 results news release, quarterly report and detailed supplemental investor information are posted on our website, telus.com/investors. On the call today will be President and CEO, Darren Entwistle, who will provide opening comments; followed by a review of our second quarter operational and financial highlights by Doug French, our CFO. After our prepared remarks, we will conclude with a question-and-answer session. In consideration of your day, we're going to try to keep this call to under an hour.
Let me direct your attention to Slide 2. This presentation, answers to questions and statements about future events, including our 2018 targets, outlook and assumptions as well as intentions for dividend growth and capital investments and the performance of TELUS, include forward-looking statements that are subject to risks and uncertainties and are made based on certain assumptions. Accordingly, actual performance could differ materially from statements made today so do not place undue reliance on them. We also disclaim any obligation to update forward-looking statements, except as required by law.
I ask that you read our legal disclaimers and refer you to the risks and assumptions outlined in our public disclosures, in particular, our second quarter Management's Discussion and Analysis and in our 2017 annual MD&A Sections 9 and 10 as well as filings with securities commissions in Canada and the United States.
As a reminder, our results for 2018 reflect the January 1 adoption of IFRS 15 while the results for the comparative period in 2017 have been adjusted for the retrospective application of the new accounting standard. Unless indicated, results outlined today reflect the new standard. The appendix of this presentation and Section 11 of our second quarter MD&A provide definitions and reconciliations of the non-GAAP measures that we use.
Let me now turn the call over to Darren, starting on Slide 3.
Darren Entwistle
Thanks, Darrell, and good morning, everyone. As you've seen today, TELUS reported second quarter results that reflect strong operational and financial performance, including healthy revenue and EBITDA expansion in both our wireless and wireline product portfolios, in concert with robust customer growth across the business. Our continued strong performance is anchored by the TELUS team's ability to achieve record performance results and wireless and wireline customer loyalty which drove our strong lifetime revenue.
In the second quarter, consolidated operating revenue increased by 5.3% while EBITDA was up 3.6%. On a pre-IFRS 15 basis, consolidated revenue and EBITDA increased 5.8% and 5%, respectively. Notably, the robust customer growth that we delivered in the quarter included 135,000 new wireless, Internet and TV customer additions, up 29% year-over-year. This was driven by the best combined retention levels on record in respect of postpaid wireless, high-speed Internet and TV and by the ongoing generational investments we are making in our leading broadband networks.
Turning to wireless. We achieved solid growth in the second quarter revenue and EBITDA growth, which were up 3.5% and 3.3%, respectively, or 4.7% and 6.4% on a pre-IFRS basis. Postpaid wireless net additions of 87,000 and total wireless additions of 91,000 represented healthy and high-quality second quarter loading. Postpaid churn in the second quarter was an industry-leading 0.83%. Consistently strong customer loyalty is, of course, the hallmark of the TELUS organization with our team having delivered a postpaid churn result below 1% for 19 of the last 20 quarters, putting us in our fifth year of churn being below 1%.
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