Quebecor inc. reports consolidated results for second quarter 2012 and renews normal course issuer bid
Montréal, Québec – Quebecor Inc. (“Quebecor” or the “Corporation”) today reported its consolidated financial results for the second quarter of 2012. Quebecor consolidates the financial results of its Quebecor Media Inc. (“Quebecor Media”) subsidiary, in which it holds a 54.7% interest.
Second quarter 2012 highlights
- Revenues: $1.09 billion, up $33.0 million (3.1%) from the second quarter of 2011.
- Operating income: down $0.7 million (-0.2%) to $357.8 million.
- Net income attributable to shareholders: $67.0 million ($1.05 per basic share), up $11.8 million ($0.19 per basic share) from $55.2 million ($0.86 per basic share) in the second quarter of 2011.
- Adjusted income from continuing operations: $48.7 million ($0.77 per basic share), down $11.3 million ($0.16 per basic share) from $60.0 million ($0.93 per basic share) in the second quarter of 2011.
- Revenue increases for all the core services of Videotron Ltd. (“Videotron”): Internet access ($20.4 million or 11.9%), cable television ($15.4 million or 6.1%), mobile telephony service ($14.8 million or 56.9%), and cable telephony service ($4.9 million or 4.5%).
- Telecommunications segment’s operating income: up $27.5 million (10.0%).
“Quebecor’s revenues rose by 3.1% in the second quarter of 2012, mainly because of sustained growth in Videotron’s sales,” said Pierre Karl Péladeau, President and Chief Executive Officer of Quebecor. “Our second quarter results were marked by the Telecommunications segment’s excellent results while our News Media segment’s results declined from the same period of 2011, mainly because of significant investments in, among other things, the distribution network and the publishing of community newspapers. However, the newspaper publishing and printing operations posted the highest operating margins, expressed as a percentage of revenues, of all the major industry players in the second quarter of 2012. We also made major investments in expanding the specialty services of TVA Group Inc. (“TVA Group”), so that their financial performance will no longer be entirely dependent on the conventional television network’s results.
“Videotron continued to grow despite the fiercely competitive environment. The mobile telephony service attracted new customers and generated additional revenue streams. We continued our business strategy, which is based on bundling services into attractive packages, coupled with superior product quality and outstanding customer service. Revenues from Videotron’s core services were all up significantly, boosting the Telecommunications segment’s operating income by $27.5 million, a 10.0% increase from the same quarter of 2011. Videotron also posted a net increase of 31,100 revenue generating units1 during the second quarter of 2012. The illico TV new generation service was rolled out across all of Videotron’s service area during the quarter and more than six million Quebecers now have access to the new cable television service, which is distinguished by its user‑friendliness and superior interfaces. Videotron also launched Ultimate Speed Internet 200, an Internet access service that sets a new standard for speed.
“The News Media segment was busy during the second quarter of 2012, acquiring Pub Extra magazine and the weekly L’Impact de Drummondville, and launching L’Écho de Victoriaville. Quebecor Media’s Québec community newspapers network now has a combined weekly circulation of over 2.5 million copies.
“To offer its customers expanded media exposure and broaden its convergence strategy, Quebecor Media has entered an entirely new media platform. Quebecor Media was chosen through a call for tenders to install, maintain and advertise on Société de transport de Montréal (STM) bus shelters for the next 20 years. For us, this is a promising move into a line of business that is experiencing significant technological change.
“In the field of electronic media, Quebecor Media announced a partnership with ReadBooks SAS, a Franco‑Québec company specializing in ebooks. The partnership will support the development of new software for Archambault Group Inc. (“Archambault Group”) and Librairie Paragraphe Bookstore that will allow them to increase their offerings and enhance their customers’ reading experience.
“Finally, on another front, Quebecor Media welcomed with great satisfaction the Québec Superior Court judgements of July 23, 2012 ordering Bell TV (formerly Bell ExpressVu) to compensate Videotron and TVA Group. The court found that Bell TV committed serious misconduct by not taking the appropriate measures at the opportune time to prevent the illegal decoding of its satellite television signals, even though it knew the extent of the piracy of its system and had the required technology at its disposal to end it. We were glad to see Superior Court rule against Bell for resorting to illegal means that weaken its competitors and for having failed to meet its obligations to protect rather than undermine the integrity of the Québec and Canadian broadcasting industry.
“In the first half of 2012, Quebecor actively pursued its customer, product and business development strategies, combined with vigorous operating cost‑control initiatives, in order to achieve its long-term growth and profitability targets.”
1 - Revenue generating units are the sum of cable television, cable and wireless Internet access and cable telephony service subscriptions, plus subscriber connections to the mobile telephony service.
For more details and to consult definitions of "operating income" and "adjusted income from continuing operations", please refer to the attached PDF file for the complete version of the press release.
Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
J. Serge Sasseville
Senior Vice President, Corporate and Institutional Affairs
Quebecor Media Inc.