Telus reports $660-million third-quarter loss on health unit impairment charge

Telus Corp. reported lower revenue, a net loss of $660-million and an $800-million writedown of its health business in its third quarter, as the company’s new chief executive officer aims to refocus the company on its core telecom business while pursuing new cost savings.

The company also made progress on some telecom metrics during the quarter, and in its release Friday, it recommitted to asset sales and outlined plans to expand its investments in artificial intelligence data centres.

The results represent another mixed quarter for Telus, which has suffered a 27-per-cent share-price slide since the beginning of the year, despite recent efforts by executives to course correct after years of heavy spending on numerous acquisitions that the company struggled to fully integrate.

In support of deleveraging and future profitability, Telus said it plans to save approximately $900-million per year by the end of 2028 by cutting operating costs and capital expenditures, with about 80 per cent of the cash savings expected to come from the telecom segment.

The plan will leave the business “better positioned to deliver sustainable, profitable growth and long-term shareholder value,” chief executive officer Victor Dodig said in a release.

The company took an $800-million non-cash impairment charge for its Telus Health business during the quarter as it determined the recoverable amount it could earn from the unit was less than what is currently accounted for in its books.

This was “due to updated growth expectations, broader market conditions and valuation update within the health portfolio as a result of the active divestiture process,” the company said in its release.

Telus said it continues to work toward its plan to sell some or all of that asset, but did not share any further details of progress in its release.

It’s the second quarter in a row that the company has taken a writedown on assets. Last quarter, the company took a $2.1-billion impairment charge for its Telus Digital unit, at the same time as it halved its dividend payout.

The company’s third-quarter net loss of $660-million, compared with a net gain of $431-million in the same period last year, was the result of the healthcare business writedown, lower operating income and higher financing costs. Adjusted net income, excluding certain costs, was also down 32 per cent year-over-year.

The Vancouver-based telecom company reported operating revenue and other income fell 2 per cent. Its service revenue – arising from contracts with customers – was down 1 per cent. Its revenue from its wireless business grew by one per cent, as the company added 84,000 net new mobile customers.

At the end of the quarter, the company’s long-term debt stood at $25.9-billion, down about 5 per cent from the previous quarter.