Montréal (Québec) – Quebecor Inc. (“Quebecor” or “the Corporation”) today reported its consolidated financial results for the second quarter of 2022. Quebecor consolidates the financial results of its wholly owned Quebecor Media Inc. (“Quebecor Media”) subsidiary.
Second quarter 2022 highlights
Revenues: $1.12 billion in the second quarter of 2022, down $16.0 million (‑1.4%) from the same period of 2021.
The Telecommunications segment’s adjusted cash flows from operations increased by $39.3 million (11.9%), its adjusted EBITDA increased by $6.0 million (1.2%) and its revenues decreased by $15.8 million (‑1.7%) in the second quarter of 2022.
Videotron Ltd. (“Videotron”) increased its revenues from mobile services and equipment by $27.0 million (11.4%) in the second quarter of 2022.
Subscriber connections to the mobile telephony service increased by 34,600 (2.1%) in the second quarter of 2022.
Consolidated Adjusted EBITDA: $491.4 million, a $10.0 million (‑2.0%) decrease.
Net income attributable to shareholders: $157.4 million ($0.66 per basic share), an increase of $33.9 million ($0.16 per basic share).
Adjusted income from continuing operating activities: $161.7 million ($0.68 per basic share), an increase of $3.4 million ($0.03 per basic share).
Adjusted cash flows from operations: $361.0 million, a $22.9 million (6.8%) increase.
On June 17, 2022, Videotron entered into an agreement with Rogers Communications Inc. (“Rogers”) and Shaw Communications Inc. (“Shaw”) to acquire Freedom Mobile Inc. (“Freedom Mobile”) for $2.85 billion on a cash‑free and debt‑free basis. The agreement, which is conditional, among other things, on clearance under the Competition Act and the approval of Innovation, Science and Economic Development Canada, provides for the acquisition of the Freedom Mobile brand’s entire wireless and Internet customer base, as well as its owned infrastructure, spectrum, and retail outlets. It also includes a long‑term undertaking by Shaw and Rogers to provide Videotron with transport services (including backhaul and backbone) and roaming services. Videotron has secured the committed debt financing required for this transaction.
Comments by Pierre Karl Péladeau, President and CEO of Quebecor:
In what remains a highly competitive environment, Quebecor maintained its operational rigour and financial discipline in the second quarter of 2022, as evidenced by the 6.8% increase in adjusted cash flows from operations to a total of $361.0 million, despite increased strategic investments in unique, differentiated content for both the TVA Network and its Club illico and Vrai over‑the‑top video platforms. These investments caused a slight $10.0 million decrease in adjusted EBITDA to $491.4 million. Videotron generated adjusted cash flows of $369.4 million, an increase of $39.3 million or 11.9%. Our efforts to better position our illico and Helix brands and improve margins led to a slight decrease in wireline equipment revenues. Nevertheless, the operating cost reduction initiatives of the past year enabled Videotron to post adjusted EBITDA of $487.5 million, an increase of 1.2%, and a 53.4% margin, still the industry standard‑setter. Videotron also increased its revenues from mobile services and equipment by 11.4% in the second quarter of 2022. The number of connections to the mobile service grew by 34,600, or 27.2% more than in the same quarter of 2021.
Videotron continues to invest in high-value growth initiatives such as wireline network extensions across the province, including the Régions Branchées program, in order to expand coverage while maintaining performance and reliability. Also, our 5G network already covers the major urban centres and roll-out is continuing apace.
The results of TVA Group Inc. (‘TVA Group’) were significantly affected by lower profitability in the Broadcasting segment in the second quarter of 2022, due mainly to increased content investments at TVA Network, particularly in reality and variety programming. Delivering varied programming of high quality remains the cornerstone of our business strategy. It’s how we attract a steadily growing number of viewers, as indicated by the 0.7‑point market share gain posted by TVA Network in the second quarter of 2022. Despite the soft advertising market due to the unfavourable business landscape and regulatory environment, our strong programming enabled us to stand out with advertisers and to limit the impact on our over‑the‑air network’s advertising revenues.
We are more determined and motivated than ever to pursue our ambitious plans to grow across Canada as an agile, proven player that aims to disrupt the market and lower prices for Canadian consumers. The acquisition of Freedom Mobile will be a highly beneficial transaction for all parties. By investing in Canadian expansion with the goal of becoming the fourth national wireless carrier, we will foster healthy competition in the interests of Canadian consumers and position ourselves in a high‑growth market, in which we will be able to offer consumers in British Columbia, Alberta and Ontario multiservice bundles and innovative mobile and Internet products. We will leverage our strong operational and competitive expertise, significant financial resources and extensive spectrum assets to continue rapidly evolving to 5G technology and a world‑class network. In addition, the recent acquisition of VMedia Inc. will support our growth strategy outside Québec with advantageous multiservice bundles, giving Canadian consumers more choice at better prices.
We remain focused on our objectives of creating value for all our stakeholders through adroit execution of our strategies on a daily basis, coupled with the operational excellence and financial discipline that have been the hallmarks of our success in recent years.
For more details and to consult definitions of "adjusted EBITDA", "adjusted income from continuing activities" and "adjusted cash flows from 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.
Quebecor Inc. and Quebecor Media Inc.