December 17, 2008 / 7:53 PM / 10 years ago

UPDATE 2-Manitoba Telecom sees small profit rise in 2009

* Sees EPS C$2.90-C$3.20 in 2009, up slightly from 2008

* Says syndicated credit facility to expand to C$600 mln (Adds CEO comments)

By Wojtek Dabrowski

TORONTO, Dec 17 (Reuters) - Manitoba Telecom Services MBT.TO forecast a small increase in annual profit but flat revenues for 2009 on Wednesday and said its banks have increased the size of a credit facility that will strengthen its balance sheet.

MTS also confirmed it expects its 2008 results will be in line with analyst estimates and its own forecasts.

For 2009, the Winnipeg, Manitoba-based company said it expects earnings per share of between C$2.90 and C$3.20, compared with a range of C$2.95 to C$3.15 in 2008.

Revenue will be essentially flat next year, at between C$1.9 billion and C$1.98 billion, MTS said. That compares with between C$1.92 billion and C$1.98 billion this year, the company said.

Pierre Blouin, the company’s CEO, told analysts in a conference call that the 2009 forecast is being made “during a time of unprecedented economic uncertainty, both globally and here in Canada.”

Analysts were expecting full 2009 revenue of C$1.96 billion and earnings per share of C$3.09 before one-time items, according to Reuters Estimates.

MTS set annualized cost cut targets at between C$35 million and C$45 million.

Blouin said that, next year, the telecom company should benefit from the “strong and growing” provincial economy of Manitoba, which supports about 70 percent of MTS’s operating cashflow and profitability.

As well, he said, the company has a diversified client base of large corporate customers on the national level, which helps protect it against some of the weakness in the economy.

“We believe that we are well positioned to face the economic challenges Canada may face in 2009,” he told analysts.

Aside from the outlook, MTS also said its lenders have committed to increase the size of the company’s syndicated credit facility to C$600 million from C$350 million. The term of the facility is also to be extended to 2012.

“This will provide sufficient liquidity for the company’s 2009 and 2010 refinancing needs,” MTS said.

The company’s shares last changed hands at C$34.43 on Tuesday on the Toronto Stock Exchange, which was shut down Wednesday due to technical difficulties.

$1=$1.20 Canadian Reporting by Wojtek Dabrowski; editing by Rob Wilson

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