Business News
Quebecor Inc. Reports Consolidated Results for Financial Year and Fourth Quarter 2009
Monday 15. March 2010 - Quebecor Inc. (TSX:QBR.A)(TSX:QBR.B) ("Quebecor") today reported its annual and fourth quarter consolidated financial results for 2009. Quebecor consolidates the financial results of its Quebecor Media Inc. ("Quebecor Media") subsidiary, in which it holds a 54.7% interest.
2009 highlights
– Quebecor records revenues of $3.78 billion, up $50.9 million (1.4%) from
2008.
– Operating income(1): up $155.6 million (13.9%) to $1.28 billion.
– Net income: $277.7 million ($4.32 per basic share) in 2009, up
$89.7 million (47.7% or $1.40 per basic share).
– Telecommunications segment: operating income up $175.0 million (21.9%)
due to customer growth.
– Restructuring and other cost-reduction initiatives in the News Media
segment generate total savings of approximately $66.0 million.
Fourth quarter 2009 highlights
– Operating income(1): up $77.5 million (25.0%) to $387.6 million, with a
$62.8 million (28.8%) increase in the Telecommunications segment.
– Net income: $73.8 million ($1.15 per basic share), compared with net loss
of $343.6 million (-$5.34 per basic share) in the same quarter of 2008.
– News Media segment: operating income up $14.5 million (26.5%).
“Quebecor logged a noteworthy operational performance in 2009,” said Pierre Karl Peladeau, President and Chief Executive Officer of Quebecor. “The Telecommunications segment’s excellent results, propelled by customer growth for all its services, which has now continued for 18 consecutive quarters, played a significant role in the Company’s strong revenues, operating income and net income. Despite the economic crisis, which has hit the media industry hard, Quebecor’s diversified business model proved to be a robust driver of growth. Our restructuring programs in the News Media segment also bore fruit. Despite the substantial drop in advertising revenues in 2009, the News Media segment’s operating income jumped 26.5% in the fourth quarter. The improvement bears witness to our ability to adapt our modus operandi in order to deliver economically viable news services that harness the power of new technologies.
(1) See “Operating income” under “Definitions.”
“Quebecor is pushing ahead with implementation of its strategic plan aimed at producing and distributing content of the highest quality on the greatest possible number of distribution platforms in Canada. We have been a customer-driven organization for years and we will remain true to that approach in 2010 as we gear up to provide state-of-the-art wireless telephone service. We are confident that this growth sector will become a mainstay of our business plan. It will enable Quebecor to distribute its exclusive original content on a new mobile platform, promising significant opportunities for multimedia synergies and long-term growth. In the wake of our reorganization and the implementation of a new business model in the media field, we have continued our ISO (Integration, Syndication, Optimization) program and the development of the QMI Agency, which was created to aggregate and circulate news texts, photos and videos published by Quebecor’s various media properties, generate new revenue streams and supply information and content to our mobile, television and print platforms. On another front, to address our customers’ needs for value-added advertising solutions, we have combined our national sales forces into a new one-stop shop, the QMI National Sales Office, which will offer customers complete media solutions.
“Strengthening our positioning as a fully integrated media group will give our customers access to a full range of advanced services of the highest calibre, at a highly competitive price,” said Mr. Peladeau. “Being a digital leader, supporting consumers as they change their habits and seizing the related growth opportunities are the challenges we face – challenges we fully intend to meet.”
Table 1
Quebecor financial highlights, 2005 to 2009.
(in millions of Canadian dollars, except per share data)
———————————————————————–
———————————————————————–
2009 2008 2007 2006 2005
———————————————————————–
Revenues $3,781.0 $3,730.1 $3,365.9 $2,998.6 $2,695.4
Operating income(1) 1,276.7 1,121.1 948.8 785.5 729.6
Net income (loss) 277.7 188.0 (968.5) (94.2) 69.3
Adjusted income from
continuing operating
activities (2), (3) 236.3 179.4 134.4 97.4 54.9
Per basic share:
Net income (loss) 4.32 2.92 (15.06) (1.47) 1.07
Adjusted income
from continuing
operating
activities(2),(3) 3.68 2.79 2.09 1.51 0.85
———————————————————————–
(1) See “Operating income” under “Definitions.”
(2) See “Discontinued operations.”
(3) See “Adjusted income from continuing operating activities” under
“Definitions.”
Analysis of 2009 results
– Quebecor’s consolidated revenues from continuing operations rose $50.9
million (1.4%) to $3.78 billion in 2009, driven by increases in the
following segments:
– Telecommunications (up $197.0 million or 10.9% of segment revenues)
mainly because of customer growth for all services;
– Leisure and Entertainment (up $5.9 million or 2.0%).
Partially offset by:
– News Media segment (down $151.9 million or -12.9%) as a result of lower
advertising revenues
– Quebecor’s operating income from continuing operations grew $155.6
million (13.9%) to $1.28 billion, mainly because of:
– $175.0 million (21.9%) increase in operating income in
Telecommunications segment;
– $14.0 million (21.2%) increase in operating income in Broadcasting
segment.
Partially offset by:
– $27.6 million (-12.2%) decrease in operating income in News Media
segment.
– Quebecor’s net income was $277.7 million ($4.32 per basic share) in
2009, compared with $188.0 million ($2.92 per basic share) in 2008. The
increase of $89.7 million (47.7% or $1.40 per basic share) was mainly
due to:
– $155.6 million increase in operating income;
– $41.9 million favourable variance in gain on valuation and translation
of financial instruments;
– $40.1 million decrease in financial expenses;
– $25.0 million decrease in charge for restructuring of operations,
impairment of assets and other special items.
Partially offset by:
– $26.5 million increase in amortization charge.
The 2008 results also reflect recognition of income from discontinued
operations in the amount of $383.3 million and a $361.1 million non-cash
charge for impairment of goodwill and intangible assets, net of income
tax and non-controlling interest.
– Adjusted income from continuing operating activities: $236.3 million
in 2009 ($3.68 per basic share), compared with $179.4 million ($2.79
per basic share) in 2008, an increase of $56.9 million ($0.89 per
basic share) or 31.7%.
Analysis of fourth quarter 2009 results
– Quebecor’s consolidated revenues from continuing operations were $1.03
billion, an increase of $24.4 million (2.4%). Revenue growth was
strongest in Telecommunications (up $59.4 million or 12.5% of segment
revenues) mainly because of sustained customer growth for all services.
The News Media segment’s revenues decreased by $28.2 million (-9.3%).
– Quebecor’s operating income from continuing operations grew $77.5
million (25.0%) to $387.6 million due to an increase in the
Telecommunications segment ($62.8 million or 28.8% of segment operating
income) resulting primarily from customer growth, and an increase in the
News Media segment ($14.5 million or 26.5%) caused essentially by a
decrease in operating costs due to, among other things, sustained
productivity improvement efforts.
The increase in operating income includes a $43.8 million favourable
variance ($34.5 million in the Telecommunications segment and $9.3
million in the Broadcasting segment) due to reversal of the provisions
for Canadian Radio-television and Telecommunications Commission (“CRTC”)
Part II licence fees.
– Net income: $73.8 million ($1.15 per basic share) in the fourth quarter
of 2009, compared with a net loss of $343.6 million ($5.34 per basic
share) in the same quarter of 2008. The $417.4 million ($6.49 per basic
share) increase was mainly due to:
– recognition in the fourth quarter of 2008 of a non-cash charge
totalling $671.2 million, including $631.0 million without any tax
consequences, for impairment of goodwill and intangible assets ($361.1
million net of income tax and non-controlling interest);
– $77.5 million increase in operating income;
– $28.8 million favourable variance in provision for restructuring of
operations and other items;
– $28.2 million favourable variance in gains on valuation and
translation of financial instruments;
Partially offset by:
– $3.7 million increase in amortization charge.
– Adjusted income from continuing operating activities: $84.0 million in
the fourth quarter of 2009 ($1.31 per basic share), compared with $60.8
million ($0.95 per basic share) in the same period of 2008, an increase
of $23.2 million ($0.36 per basic share) or 38.2%.
Dividends
On March 9, 2010, 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 April 20, 2010 to shareholders of record at the close of business on March 26, 2010. 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.
Discontinued operations
On January 21, 2008, World Color Press, Inc. (“WCP,” formerly Quebecor World Inc.) and its U.S. subsidiaries placed themselves under the protection of the Companies’ Creditors Arrangement Act in Canada. On the same date, WCP’s U.S. subsidiaries placed themselves under the protection of Chapter 11 of the United States Bankruptcy Code. Since that date, in accordance with generally accepted accounting principles, Quebecor’s investment in WCP has no longer been consolidated, the book value of Quebecor’s investment in WCP has been marked to zero, and WCP’s activities are considered discontinued operations for the purposes of Quebecor’s consolidated financial statements.