Revenue and EBITDA both increased by 13% for the third quarter over the same period in 2000. The company also announced an immediate action plan to reduce costs through an accelerated program for integration across Aliant Inc.’s operations.
Aliant has achieved significant growth in the third quarter in the face of increasing competition and a softening economy. Because of the anticipated effects of these market conditions and recent negative regulatory changes in the telecommunications industry impacting 2002, we are implementing an aggressive plan to reduce costs and accelerate the ongoing consolidation of our operations to better position the company for continued solid performance, said Stephen Wetmore, Aliant’s President and CEO.
In a separate move to enhance growth opportunities and maintain our telecom unit as the leading Atlantic Canadian telecommunications company, we are strengthening Aliant Telecom’s ties with the Bell family. There are many ways for our companies to cooperate, to leverage our assets, to enhance our product and service mix, and to expand into new markets to better serve our customers, said Wetmore.
With these strategic initiatives, we remain on track to meet our financial targets for the year and to continue to drive growth in future years through more efficient and competitive operations, he said.
In the third quarter, Aliant’s total revenues increased to $641 million from $567 million in the same period in 2000. This growth was driven primarily by increases in remote communications and organic growth across all lines of business. For the year to date, Aliant’s revenues increased 17% to $1.9 billion from $1.7 billion in the same period in 2000.
Total cash operating expenses for the quarter were $224 million compared with $210 million for the third quarter of 2000. For the year to date, expenses increased 12% to $713 million from $639 million in the same period last year, primarily as a result of expanded operations from acquisitions made late in 2000.
Over the comparable period in 2000, EBITDA for the quarter increased 13% to $250 million from $221 million and for the year it increased 11% to $712 million from $641 million.
Initiatives to enhance shareholder value and customer service Integration Action Plan
Aliant’s management team is implementing an aggressive action plan to accelerate the second-stage efficiencies resulting from the successful merger in 1999 that created Aliant Inc. Cost savings initiatives will result in a one-time charge in the fourth quarter of $111 million. Management estimates pre-tax cost savings of approximately $56 million annually, a level that will be reached in early 2002.
The $56 million annual cost savings helps offset a negative EBITDA impact of approximately $66 million, anticipated in 2002. This expected decline is attributable to the Canadian Radio-Television and Telecommunications Commission’s (the CRTC) new contribution regime and cost subsidy rules.
Our pro-active moves to realize accelerated synergies will position Aliant for continued strong performance. As a result, despite difficult economic and increasingly competitive conditions, this year we expect to achieve consolidated revenue and EBITDA growth in excess of 15%, said Wetmore.
