Montréal, Québec ‑ Quebecor Inc. (“Quebecor" or the “Corporation") today reported its consolidated financial results for the first quarter of 2011 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 consolidated financial statements for the three-month period ended March 31, 2011 have therefore been prepared in accordance with IFRS and comparative data for 2010 have been restated. For more information, see “Transition to IFRS” below.
Highlights since end of 2010
- Quebecor records revenues of $990.5 million in the first quarter of 2011, up $42.4 million (4.5%) from the same quarter of 2010.
- Operating income : $294.3 million, up $3.9 million (1.3%) from the first quarter of 2010.
- Net income attributable to shareholders: $34.3 million ($0.53 per basic share) compared with $34.9 million ($0.54 per basic share) in the first quarter of 2010, a decrease of $0.6 million ($0.01 per basic share) or ‑1.7%.
- Adjusted income from continuing operations : $35.9 million in the first quarter of 2011 ($0.56 per basic share) compared with $43.4 million ($0.67 per basic share) in the first quarter of 2010, a decrease of $7.5 million ($0.11 per basic share) or ‑17.3%.
- Videotron Ltd. ("Videotron") net customer base change during three‑month period ended March 31, 2011: +28,600 subscriber connections to mobile telephone service, +15,500 customers for cable telephone service, +11,500 for cable Internet access, ‑3,000 for cable television services (including 24,100 customer increase for Digital TV).
- Videotron’s new mobile services network, launched in September 2010, is upgraded from 3G+ to 4G (“4G network”).
- 143,600 subscriber connections to Videotron’s 4G network as of March 31, 2011, including 86,100 new connections and 57,500 migrations from the mobile virtual network operator (“MVNO”) service.
- Pooling of sales forces at the national level and capital expenditures plan in the News Media segment in order to increase revenue streams; new contracts signed with Jean Coutu Group (PJC) Inc., Michael Rossy Ltd., Golf Town, Metro‑Richelieu Inc. and PepsiCo.
“Quebecor posted revenue and operating income growth in the first quarter of 2011 despite the impact of major investments in new products and services in 2011 for the purpose of protecting and expanding our markets, without affecting our financial position,” said Pierre Karl Péladeau, President and Chief Executive Officer of Quebecor.
“In an increasingly competitive industry, Videotron continued growing its customer base. It has added an average of nearly 12,500 new customers per month to its new mobile services network since it launched in September 2010, exceeding targets. In view of our mobile services’ success to date, we are confident that our 4G network will achieve strong market penetration in all the areas where it has been rolled out. The 4G network now covers 90% of Videotron’s service area and is available to more than four million people in Québec.
“However, the roll-out of Videotron’s new mobile services network negatively impacted net income in the first quarter of 2011. In the first months following a product launch, the revenues generated by the new product are not sufficient to cover the higher expenses, including amortization charges in the case of the 4G network. The impact is particularly evident in the first quarter 2011 comparative figures for adjusted income from continuing operations.
“The News Media segment, which continued adapting to new market realities, completed several stages in its revenue stream development plan during the quarter. The results include a five-year printing agreement with Jean Coutu Group. The estimated $50.0 million contract, one of the largest commercial contracts in Québec, calls for the printing of approximately 150 million items per year.
“The Quebecor Media Network’s breadth, combined with Quebecor Media’s state-of-the-art printing platform, position the Corporation as a supplier of choice when major retail printing and distribution contracts in Canada come up for renewal. The Quebecor Media Network now reaches nearly 90% of Québec households and more than 50% of the Ontario market; it also has a significant presence in western Canada. The Quebecor Media Network now serves a total of 6.2 million households across Canada each week, almost 2.0 million more than its nearest competitor.
“In the News Media segment’s publishing operations, Sun Media Corporation’s urban dailies and free newspapers registered an average 5.1% net increase in readership in the NADbank 2010 survey, while competitors’ readership was virtually flat at 0.8% growth. Among other things, NADbank’s numbers confirmed the strength of Le Journal de Montréal and the Toronto Sun in their respective markets. The survey also showed that the Corporation’s spending on its 24 HoursTM and 24 heuresMC newspapers is paying off, with 7.6% growth in their national readership.
“While the series of investments made by the Corporation over the past several quarters continue cutting into the News Media segment’s results, we believe that the initiatives taken to date will equip it to take full advantage of future growth opportunities.
“Following up on the initiatives it launched during 2010, Quebecor forged ahead with various projects during the first quarter of 2011 to position itself for the coming years. The acquisition of Les Hebdos Montérégiens’ 15 community newspapers, the end of the labour dispute at Le Journal de Montréal, the opening of the QMI Agency’s Ottawa bureau, the launch of the Sun News and Mlle specialty channels, the agreement on usage and naming rights to the future arena in Québec City, and the signing of numerous multiplatform advertising agreements are all concrete steps taken in the first quarter as part of our convergence and synergy strategy. We plan to continue along the same path in order to stand out in the Canadian media and telecommunications landscape, constantly pursuing the goal of creating value for the Corporation and its shareholders.”
Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
J. Serge Sasseville
Vice President, Corporate and Institutional Affairs
Quebecor Media Inc.