Manitoba Telecom Services Inc. incurred a number of costs and a sluggish financial performance in the third quarter ending Sept. 30, 2013 some of which was a result the federal government’s rejection of the sale of its Allstream unit to Accelero last month.
On Thursday the company reported declines in revenue, EBITDA and earnings per share.
Revenue for the quarter was $408.4 million down 3.7 per cent, EBITDA (earnings before interest, taxes, depreciation and amortization) was $142.7 million down two per cent and earnings per share was 38 cents down 24 per cent.
The company declared $0.425 per share cash dividend for the quarter.
MTS CEO Pierre Blouin, said, "While we are disappointed in the government’s decision to reject the sale of Allstream, the company goes forward with a solid 2014 outlook and an attractive dividend fully supported by strong and growing free cash flow from our incumbent position in Manitoba, combined with interesting growth opportunities at Allstream."
The company incurred a combination of non-recoverable, transaction and restructuring costs associated with the proposed sale of Allstream amounting to $21.7 million during the nine months ended September 30, 2013. A further $13 million is anticipated to be recorded in the fourth quarter of 2013.
Additionally, there will be a lower depreciation and amortization expense of $31.5 million for the nine months ended September 30, 2013 ($9.3 million and $22.2 million for the second and third quarters of 2013, respectively).
The deposit of $55 million that had been held in escrow pending the close of the Allstream transaction has been returned to Accelero.
The company is contemplating an equity offering to prepay its solvency funding requirements for the coming years. In the absence of prefunding, the company’s cash solvency requirement for 2014 would be approximately $55 million.
MTS shares were up nine cents on Thursday to $29.49