- Telus has cut its dividend by 55 per cent, reducing it from 41.84 cents per share to 18.75 cents per share, as part of a strategy to improve its finances after a challenging period for the company’s share price.
- The dividend cut is expected to generate about $2.7 billion in cash savings through 2028, which will be used to reduce Telus's long-term debt.
- Telus has issued a notice declaring a quarterly dividend of $0.1875 Canadian per share, payable on October 1, 2026, to shareholders of record at the close of business on September 10, 2026.
- Telus's financial guidance has been lowered for the year, with expectations of flat revenue or a decline of up to 2 per cent, compared to prior guidance of a revenue increase of 2 to 4 per cent.
- Adjusted EBITDA is now expected to fall by 2 to 4 per cent for the year, a significant change from the previous guidance of growth of 2 to 4 per cent.
- Full-year cash flow is projected to be $1.8 billion this year, down from the prior estimate of $2.45 billion, representing a decrease of about 27 per cent.
- Telus's share price has declined by nearly 46 per cent in the last five years and 16 per cent since the beginning of the year.
Telus Corp. has announced a significant 55% cut to its quarterly dividend, reducing it to $0.1875 per share, as part of a strategy to enhance its financial stability amid declining share prices. This decision is expected to generate approximately $2.7 billion in cash savings through 2028, which will be allocated towards reducing long-term debt.
The company has also revised its financial outlook, projecting that revenue will remain flat or decrease by up to 2%, a stark contrast to earlier guidance that anticipated a 2% to 4% increase. Additionally, adjusted EBITDA is now expected to decline by 2% to 4% for the year, compared to previous expectations of growth.
Analysts have reacted to the news, with TD Cowan analyst Vince Valentini stating that the changes were “much worse than expected.” Meanwhile, Bank of Nova Scotia analyst Maher Yaghi noted that the cut was necessary to restore financial flexibility. Before the cut, Telus's dividend yield had reached 11.6%, indicating market anticipation of a reduction.
The company’s share price has plummeted nearly 46% over the past five years and 16% since the start of the year, prompting the new CEO, Victor Dodig, to take decisive action. This move follows a trend in the telecom sector, as seen with BCE Inc., which also reduced its dividend last year to reallocate funds.
“Telus also cut full-year guidance, now expecting revenue flat to down 2 per cent and adjusted EBITDA down 2 to 4 per cent. Full-year cash flow is projected at $1.8-billion, down about 27 per cent from the prior $2.45-billion estimate, as new CEO Victor Dodig resets the company's finances.”
PR Newswire Canada
The Globe and Mail
