Business News
Quebecor Inc. Reports Consolidated Results for Second Quarter 2009
Thursday 06. August 2009 - Quebecor Inc. ("Quebecor") (TSX:QBR.A) (TSX:QBR.B) today reported its consolidated financial results for the second quarter of 2009. Quebecor consolidates the financial results of its Quebecor Media Inc. subsidiary ("Quebecor Media"), in which it holds a 54.7% interest.
Quebecor Media has renamed two of its business segments to better reflect its comprehensive product line: the Cable segment has become the Telecommunications segment and the Newspapers segment has become the News Media segment.
Highlights since end of first quarter 2009
– Quebecor records revenues of $939.4 million, down $2.9 million (-0.3%) from second quarter 2008.
– Operating income(1): up $39.0 million (14.1%) to $315.9 million.
– Net income: $76.8 million ($1.19 per basic share), up $19.3 million (33.6%) from $57.5 million ($0.90 per basic share) in the same period of 2008.
– Adjusted income from continuing operating activities(2): $56.3 million in second quarter 2009 ($0.88 per basic share), up $14.8 million ($0.23 per basic share), or 35.7%, from $41.5 million ($0.65 per basic share) in the same period of 2008.
– Telecommunications segment: operating income up $50.5 million (27.7%). Customer growth in second quarter 2009: +43,900 for cable telephone service, +20,600 for cable Internet access, +3,400 for cable television service (including 27,100 customer increase for illico Digital TV), +5,500 activated phones for wireless telephone service.
– Roaming agreements with wireless providers Rogers Communications Inc. (“Rogers”) and T-Mobile USA, Inc.: Videotron Ltd. (“Videotron”) will be able to serve future customers for its Advanced Wireless Services (“AWS”) in Canada and in the United States.
– Tower-sharing agreements with Rogers and Bell Mobility in Quebec and in the Ottawa area: Videotron will be able to build network at anticipated cost.
(1)See “Operating income” under “Definitions.”
(2)See “Adjusted income from continuing operations” under “Definitions.”
“In what continues to be a constantly challenging economic and financial environment, Quebecor’s net income grew 33.6% in the second quarter of 2009 to $76.8 million, or $1.19 per basic share,” said Pierre Karl Peladeau, President and Chief Executive Officer of Quebecor. “Once again, the improved results are being driven by the Telecommunications segment, which significantly increased its operating income; Videotron registered customer growth for all its services for the 16th consecutive quarter. At the same time, Videotron is pushing ahead with its AWS project: it has reached roaming and tower-sharing agreements, which will enable it to build out its network within budget, offer customers service of the highest quality across Canada and the United States, and limit the proliferation of towers in Quebec. Meanwhile, in our News Media segment, the restructuring programs and other cost reduction initiatives launched in late 2008 have already generated estimated savings of $25.0 million in the first half of 2009. They are expected to yield still greater savings in the second half of the year.”
Table 1
Quebecor second quarter financial highlights, 2005-2009
(in millions of Canadian dollars, except per share data)
————————————————————————-
————————————————————————-
2009 2008 2007 2006 2005
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Revenues $ 939.4 $ 942.3 $ 815.3 $ 739.9 $ 669.1
Operating
income(1) 315.9 276.9 230.6 205.9 194.0
Income from
continuing
operations 76.8 57.5 50.1 17.6 60.8
Net income 76.8 57.5 43.4 13.7 56.2
Adjusted income
from continuing
operating
activities(2) 56.3 41.5 37.7 30.4 16.9
Per share data:
Income from
continuing
operations 1.19 0.90 0.78 0.27 0.95
Net income 1.19 0.90 0.67 0.21 0.87
Adjusted income
from continuing
operating
activities(2) 0.88 0.65 0.59 0.47 0.26
————————————————————————-
————————————————————————-
(1)See “Operating income” under “Definitions.”
(2)See “Adjusted income from continuing operating activities” under
“Definitions.”
Analysis of second quarter 2009 results
– Quebecor’s revenues decreased $2.9 million (-0.3%) to $939.4 million.
– Revenues increased in the following segments: Telecommunications (by
$39.9 million or 8.9% of segment revenues) mainly because of customer
growth for all services; Leisure and Entertainment ($4.5 million or
7.1%); and Broadcasting ($0.5 million or 0.5%).
– Revenues decreased in News Media (by $49.5 million or -15.6%) almost
entirely as a result of lower advertising revenues.
– Operating income increased $39.0 million (14.1%) to $315.9 million, due
primarily to an increase in the Telecommunications segment ($50.5 million
or 27.7% of segment operating income) resulting mainly from customer
growth. Operating income more than doubled in the Leisure and
Entertainment segment, rising $2.7 million. Operating income decreased
$18.1 million (-24.6%) in News Media.
The increase in operating income includes a $21.6 million favourable
variance (including $16.7 million in the Telecommunications segment and
$4.9 million in the Broadcasting segment) related to retroactive
recognition in the second quarter of 2008 of a provision for Canadian
Radio-television and Telecommunications Commission (“CRTC”) Part II
licence fees.
– Quebecor’s net income totalled $76.8 million ($1.19 per basic share),
compared with $57.5 million ($0.90 per basic share) in the same period of
2008, an increase of $19.3 million (33.6%).
– The increase was mainly due to:
– $39.0 million increase in operating income;
– $17.1 million decrease in financial expenses.
Offset by:
– recognition in the second quarter of 2009 of a $13.6 million
non-cash charge for impairment of goodwill and intangible assets;
– $13.5 million unfavourable variance in the gain on valuation and
translation of financial instruments;
– $7.5 million increase in non-controlling interest;
– $5.5 million increase in amortization charge.
– Adjusted income from continuing operating activities: $56.3 million in
the second quarter of 2009 ($0.88 per basic share), compared with $41.5
million ($0.65 per basic share) in the same period of 2008, an increase
of $14.8 million ($0.23 per basic share), or 35.7%.
Analysis of year-to-date results
– Quebecor’s revenues increased $16.2 million (0.9%) to $1.84 billion.
– Revenues increased in the following segments: Telecommunications (by
$86.8 million or 9.9% of segment revenues), Leisure and Entertainment
($6.0 million or 4.8%), Broadcasting ($3.8 million or 1.7%) and
Interactive Technologies and Communications ($2.3 million or 5.2%).
– Revenues decreased in News Media (by $82.1 million or -13.8%).
– Operating income increased $54.5 million (10.2%) to $588.1 million, due
primarily to an increase in the Telecommunications segment ($77.5 million
or 20.5% of segment operating income). Operating income decreased in News
Media (by $34.4 million or -28.7%).
– Quebecor’s year-to-date net income totalled $134.5 million ($2.09 per
basic share) compared with $485.9 million ($7.56 per basic share) in the
same period of 2008.
– Favourable variances in the following items:
– $54.5 million increase in operating income;
– $30.1 million decrease in financial expenses;
– $18.4 million decrease in income tax expense.
Outweighed by:
– recognition in the first quarter of 2008 of income from discontinued
operations in the amount of $383.3 million;
– $29.5 million increase in non-controlling interest;
– recognition in the first half of 2009 of $13.6 million non-cash
charge for impairment of goodwill and intangible assets;
– $13.1 million increase in amortization charge;
– $13.0 million unfavourable variance in the gain on valuation and
translation of financial instruments.
– Adjusted income from continuing operating activities: $99.4 million in
the first half of 2009 ($1.55 per basic share), compared with $76.1
million ($1.19 per basic share) in the same period of 2008, an increase
of $23.3 million ($0.36 per basic share) or 30.6%.
Dividends
On August 5, 2009, the Board of Directors of Quebecor declared a quarterly dividend of $0.05 per share on Class A Multiple Voting Shares and Class B Subordinate Voting Shares, payable on September 15, 2009 to shareholders of record at the close of business on August 21, 2009. This dividend is designated to be an eligible dividend, as provided under subsection 89(14) of the Canadian Income Tax Act and its provincial counterpart.