Montréal, Québec - Quebecor Inc. (“Quebecor" or “the Corporation") today reported its consolidated financial results for the second quarter of 2011 and announced a normal course issuer bid. Quebecor consolidates the financial results of its Quebecor Media Inc. ("Quebecor Media") subsidiary, in which it holds a 54.7% interest.
Quebecor adopted International Financial Reporting Standards (“IFRS”) on January 1, 2011. The Corporation’s condensed consolidated financial statements for the three-month and six-month periods ended June 30, 2011 have therefore been prepared in accordance with IFRS and comparative figures for 2010 have been restated.
Second quarter 2011 highlights
- Quebecor records revenues of $1.05 billion, up $59.4 million (6.0%) from the second quarter of 2010.
- Operating income: up $6.6 million (1.9%) to $358.5 million.
- Net income attributable to shareholders: $55.2 million ($0.86 per basic share) compared with $60.8 million ($0.95 per basic share) in the second quarter of 2010, down $5.6 million ($0.09 per basic share) or ‑9.2%.
- Adjusted income from continuing operations: $60.0 million ($0.93 per basic share), compared with $62.9 million ($0.98 per basic share) in the second quarter of 2010, down $2.9 million ($0.05 per basic share) or ‑4.6%.
- Videotron Ltd. (“Videotron”) revenue-generating units1: up 52,700 from the previous quarter, compared with a 30,100‑unit increase in the second quarter of 2010; up 283,900 (6.9%) during the 12-month period ended June 30, 2011.
- Videotron net customer base change during three-month period ended June 30, 2011: +45,900 subscriber connections to mobile telephone service, +11,800 customers for cable telephone service, +2,900 for cable Internet access, ‑7,900 for cable television services (including 26,700 customer increase for Digital TV). All the cable television customers lost during the second‑quarter moving season were recovered by July 15, 2011.
- Subscriber connections to Videotron’s 4G network: 203,800 as of June 30, 2011, including 133,200 new connections and 70,600 migrations from the mobile virtual network operator (“MVNO”) service.
“Quebecor posted revenue and operating income growth in the second quarter of 2011,” said Pierre Karl Péladeau, President and Chief Executive Officer of Quebecor. “Attesting to the success of the Corporation’s investment and development strategy, revenues grew in all business segments despite aggressive competition in many of those segments.
“In a fiercely competitive industry, Videotron continues to stand out and grow its customer base. Videotron had a total of 4,419,400 revenue‑generating units1 as of June 30, 2011, an increase of 52,700 from the end of the previous quarter, 75.1% more than the increase in the corresponding period of 2010. Videotron added 45,900 subscriber connections to its mobile services network in the second quarter of 2011, exceeding targets. By June 30, 2011, Videotron’s 4G network was available to more than six million people.
“Introducing a new product entails significant capital expenditures and the revenues generated during the first months following a launch are not always sufficient to cover the higher expenses. Nevertheless, our debt ratios have been advantageously maintained since we embarked on our capital expenditures program for the mobile telephone network. In addition, the Telecommunications segment increased its operating income by $9.7 million (3.7%) in the second quarter of 2011.
“The Corporation pressed ahead with its investment plan in the News Media segment with a view to increasing and diversifying its revenue streams. Several contracts were finalized during the second quarter of 2011, including a contract between Quebecor Media Printing Inc. and The Jean Coutu Group (PJC) Inc. and one between the QMI National Sales Office and Omnicom Group Inc. The Corporation continued investing in its News Media segment in order to adjust to the new market environment. While the spending is impacting the segment’s financial results for now, it is essential to our long‑term growth.
“The Corporation seized new business opportunities during the second quarter. Quebecor Media acquired the Montreal Junior Hockey Club and plans to relocate it to Blainville‑Boisbriand, a northern suburb of Montréal, Québec. Quebecor Media’s majority interest in a Quebec Major Junior Hockey League team, to be known as the Blainville‑Boisbriand Armada, will give access to content for its existing and future content delivery platforms, particularly in view of the upcoming launch of the TVA Sports channel in early fall 2011. TVA Sports has also signed long-term broadcasting agreements with a number of leading sport properties that have strong fan followings. TVA Group Inc. (“TVA Group”) has also recruited high-profile sports columnist Réjean Tremblay, who will comment on sports for several Quebecor Media properties.
“At the same time, we have enriched our service offerings in our Broadcasting segment with the launch of the new Mlle digital channel, a multiplatform brand designed specifically for women, and the launch of the English-language news and opinion specialty channel Sun TV News (“Sun News”).
“We are continuing implementation of our multiplatform content development strategy in niches with strong growth prospects.”
1 - Revenue-generating units are the sum of cable television, Internet access and cable telephone service subscriptions, plus subscriber connections to the mobile telephone 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.
Jean-François Pruneau Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
J. Serge Sasseville
Vice President, Corporate and Institutional Affairs
Quebecor Media Inc.