Montréal, Québec – Quebecor Inc. (“Quebecor” or the “Corporation”) today reported its consolidated financial results for the second quarter of 2021. Quebecor consolidates the financial results of its wholly owned Quebecor Media Inc. (“Quebecor Media”) subsidiary.
Second quarter 2021 highlights
Revenues: $1.13 billion in the second quarter of 2021, up $127.4 million (12.7%) from the same period of 2020.
Adjusted EBITDA: $501.4 million, up $25.7 million (5.4%).
Adjusted income from continuing operating activities: $158.3 million ($0.65 per basic share), an increase of $13.4 million ($0.08 per basic share) or 9.2%.
Net income attributable to shareholders: $123.5 million ($0.50 per basic share), a decrease of $51.4 million ($0.19 per basic share).
Cash flows from operations: $338.1 million, up $12.0 million (3.7%).
The Telecommunications segment grew its revenues by $59.3 million (6.8%) and its adjusted EBITDA by $17.9 million (3.9%) in the second quarter of 2021.
Videotron Ltd. (“Videotron”) significantly increased its revenues from wireline equipment ($28.1 million or 127.1%), mobile services and equipment ($26.3 million or 12.4%), and Internet access ($25.7 million or 9.3%) in the second quarter of 2021.
There was an increase of 27,200 connections (1.8%) to the mobile telephony service and 5,300¹ subscriptions (0.3%) to the Internet access service in the second quarter of 2021.
On July 29, 2021, Quebecor announced an investment of nearly $830.0 million by Videotron in the acquisition of 294 blocks of spectrum in the 3500 MHz band across the country. More than half of the investment is concentrated in four Canadian provinces outside Québec: southern and eastern Ontario, Manitoba, Alberta and British Columbia.
On July 16, 2021, TVA Group Inc. (“TVA Group”) announced that the studios of Canadian film and television industry leader MELS will be enlarged with the construction of MELS 4, with the support of the Québec government and the City of Montréal. The project will strengthen MELS’ position on the market for foreign blockbusters and series.
On June 17, 2021, Videotron issued $750.0 million aggregate principal amount of 3.625% Senior Notes maturing on June 15, 2028, for net proceeds of $743.2 million. Videotron also issued US$500.0 million aggregate principal amount of 3.625% Senior Notes maturing on June 15, 2029, for net proceeds of $599.6 million.
On June 3, 2021, Quebecor Media and Videotron issued redemption notices for their Senior Notes in the aggregate principal amounts of $500.0 million and US$800.0 million respectively, bearing interest at 6.625% and 5.000% and maturing on January 15, 2023 and July 15, 2022, for a total cash consideration of $1.38 billion.
On May 26, 2021, Videotron announced the upcoming launch of Vrai, a new Québec subscription platform that will meet the strong demand for unscripted lifestyle, documentary and entertainment content.
On May 12, 2021, Videotron announced the roll-out of its 5G network in Québec City, following the successful launch in Montréal in December 2020. With its increased speed, expanded connectivity and minimal latency, 5G will open up a world of possibilities for Québec City customers.
As the Québec economy recovered, our sustained efforts and disciplined execution on our business strategies yielded a solid performance in the second quarter of 2021, as evidenced by increases of 12.7% in revenues, 5.4% in adjusted EBITDA and 9.2% in the Corporation’s adjusted income from continuing operating activities. These excellent results translated into a 3.7% increase in cash flows from operations.
Videotron’s success stems from its innovative solutions, unique customer experience and, above all, robust wireline and mobile networks, and we are very proud that more and more consumers are enjoying the benefits, Mr. Péladeau commented.
Over the past 12 months, we have added 125,500 (8.9%) connections to our mobile telephony service and 60,900 (3.5%) new users to our Internet service. In addition, Videotron has been selected under Canada-Québec Operation High-Speed to connect thousands of homes in various regions of Québec to high-speed Internet, in partnership with the Government of Canada and the Québec government. By September 30, 2022, approximately 37,000 more Québec households will be able to access Videotron’s reliable, powerful network and unrivalled range of connectivity and entertainment products and services. To serve our customers throughout our service area, we also continued the roll-out of our 5G mobile network. Québec City residents can now take advantage of this cutting‑edge technology, the full potential of which we have only begun to measure.
Reaching consumers wherever they may be with exclusive, high-quality content remains central to Videotron’s business model. We are very excited about the upcoming launch of Vrai, Québec’s first subscription streaming service devoted entirely to unscripted lifestyle, documentary and entertainment content. Vrai will go live by the end of 2021 with thousands of hours of all‑French, on‑demand content, including more than 40 first-run exclusive original productions. With the advent of Vrai, Quebecor Content becomes the leading source of original productions in Québec.
In keeping with our traditional role as a leader in innovation, our substantial investment in the acquisition of blocks of 3500 MHz spectrum paves the way for major projects in Québec and other Canadian provinces in the coming years, which will bring our cutting‑edge technology and healthy competition to large numbers of Canadian consumers. In addition, this acquisition is crucial to the continued deployment of 5th generation mobile technology in Québec and across Canada, as it will facilitate the roll-out of top‑quality 5G mobile broadband services.
As a result of the resumption of operations in its various segments, TVA Group posted a $55.6 million (53.5%) increase in revenues and a $6.6 million (89.6%) increase in adjusted EBITDA, driven in part by significant growth in advertising revenues at TVA Network and the specialty channels, said Pierre Karl Péladeau, Acting President and Chief Executive Officer of TVA Group.
TVA Group’s total market share was 42.6%. The TVA Sports specialty channel stood out with exceptional 5.0‑point market share growth, mainly because of the Montréal Canadiens’ strong performance in the National Hockey League playoffs. As well, the Film Production & Audiovisual Services segment is operating at full steam again. We were pleased to announce the construction of MELS 4, which will increase the size of MELS’ studios by more than 160,000 square feet. This expansion will make MELS more attractive to foreign blockbusters and television series.
In order to ensure the sustainability of our advertising revenues and the vitality and competitiveness of local news media in the face of global competition, it is more urgent than ever that the federal government legislate to enable Canadian press publishers to negotiate collectively with the Web giants to obtain fair compensation for the use of their content. Canadian Heritage concurs with this position, which we have been defending for years. It is time that the government table a bill to establish a framework that enables newspaper publishers to negociate on a level playing field. We need to stand together if we are to secure the future of news coverage in Québec and Canada, Mr. Péladeau commented.
Since the beginning of the 2021 financial year, Videotron has issued more than $2.00 billion in aggregate principal amount of Senior Notes bearing interest at the very advantageous rates of 3.125% and 3.625%, confirming Videotron’s status as an issuer of the first rank in both the Canadian and U.S. markets, said Hugues Simard, Chief Financial Officer of Quebecor.
Quebecor Media and Videotron used a portion of the proceeds from these issues to prepay Senior Notes bearing interest at 6.625% and 5.000%, for a total net disbursement of $1.38 billion. These favourable financing transactions will generate annual savings of more than $30.0 million in interest on the debt.
With Québec well positioned to emerge from the pandemic, we remain confident in our growth prospects and the pursuit of our promising projects. We are in an excellent financial position and we continue managing our operations prudently, while focusing on the execution of our targeted strategies for the benefit of all our stakeholders, concluded Pierre Karl Péladeau.
¹The number for the end of the first quarter of 2021 has been lowered by 2,500 customers to correct an irregularity discovered in the Revenue‑generating unit (“RGU”) growth compilation systems.
For more details and to consult definitions of "adjusted EBITDA", "adjusted income from continuing activities", "cash flows from operations" and "revenue-generating unit" please refer to the attached PDF file for the complete version of the press release.
Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
Quebecor Inc. and Quebecor Media Inc.