By Robb M. Stewart
Telus hit pause on growing its dividend and will scale back its discounted dividend reinvestment plans as the communications-technology company looks to bolster its balance sheet.
The Canadian company said Wednesday it will suspend dividend growth and maintain its quarterly payout at the most-recent level until the share price reflects growth prospects.
It also will systematically step down its discounted dividend reinvestment plan, a program that allows investors to use cash dividends to buy additional shares. The discount on the plan will be reduced to 1.75% for dividends declared next February and May, from 2% currently. The discount will be cut to 1.5% for the following two payouts and to 1% for dividends declared in 2027.
Telus said the steps will help it reduce its net debt to earnings before interest, taxes, depreciation and amortization leverage ratio to about three times by the end of 2027, from 3.5-times at the end of September.
It expects the ratio to improve to roughly 3.3-times by the end of 2026, supported by potential hybrid note offerings and free cash flow generation.
Telus said it anticipates generating about 2.15 billion Canadian dollars ($1.54 billion) in free cash flow in 2025. And for the following three years, from 2026 through 2028, it forecast free cash flow growing at a minimum 10% compounded annual rate. Preliminary target for free cash flow for 2026 is C$2.4 billion, with capital expenditure targeted at roughly C$2.3 billion for the year.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
December 03, 2025 08:02 ET (13:02 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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