Montréal, Québec – Quebecor Inc. (“Quebecor” or “the Corporation”) today reported its consolidated financial results for the first quarter of 2014. Quebecor consolidates the financial results of its Quebecor Media Inc. (“Quebecor Media”) subsidiary, in which it holds a 75.4% interest.
First quarter 2014
- Revenues up $11.4 million (1.1%) to $1.04 billion.
- Adjusted operating income: $346.5 million, up $21.5 million (6.6%) compared with the first quarter of 2013.
- Net income attributable to shareholders: $40.7 million ($0.33 per basic share) in the first quarter of 2014 compared with $35.6 million ($0.29 per basic share) in the same period of 2013, a favourable variance of $5.1 million ($0.04 per basic share).
- Adjusted income from continuing operations: $49.3 million ($0.40 per basic share) in the first quarter of 2014, compared with $36.0 million ($0.29 per basic share) in the same period of 2013, an increase of $13.3 million ($0.11 per basic share).
- The Telecommunications segment grew its revenues by $31.8 million (4.8%) and its adjusted operating income by $21.9 million (7.0%) in the first quarter of 2014.
- Videotron Ltd. (“Videotron”) recorded first quarter 2014 revenue increases for all of its major services: Internet access ($13.6 million or 6.9%), mobile telephony ($11.7 million or 23.4%), cable telephony ($2.2 million or 1.9%), and cable television ($0.8 million or 0.3%).
- On April 28, 2014, Pierre Dion, President and Chief Executive Officer of TVA Group Inc. (“TVA Group”), was appointed President and Chief Executive Officer of Quebecor and Quebecor Media, replacing Robert Dépatie who resigned as President and Chief Executive Officer of Quebecor, Quebecor Media and Videotron for health reasons. Pierre Dion will continue to serve as President and Chief Executive Officer of TVA Group until a successor is named. Manon Brouillette was named President and Chief Executive Officer of Videotron on May 7, 2014.
- On March 9, 2014, Pierre Karl Péladeau resigned all his positions on the Boards of Directors of Quebecor and its subsidiaries following his decision to enter politics. Subsequently, Sylvie Lalande was appointed Chairperson of the Board of TVA Group on March 10, 2014 and Françoise Bertrand was appointed Chairperson of the Board of Quebecor Media on March 12, 2014.
- Since March 28, 2014, Apple products have been included in the selection of mobile devices Videotron offers to its customers. A new illico app was released for the iPhone 4 and 5 (5C and 5S). It makes thousands of hours of content from some 50 television channels available free of charge to subscribers to Videotron’s cable television service.
- On April 3, 2014, Videotron completed the acquisition of seven 700 MHz spectrum licences in the Industry Canada spectrum auction for a total consideration of $233.3 million. The licences for Canada’s four most populous provinces make it possible to reach approximately 80% of Canada’s population, more than 28 million people.
Quebecor exhibited solid growth in the first quarter of 2014 with a 6.6% increase in adjusted operating income and a 36.9% increase in adjusted income from continuing operations,” noted Pierre Dion, President and Chief Executive Officer of Quebecor. “The growth was driven primarily by the Telecommunications segment, as well as by the favourable impact of the various refinancing operations completed at advantageous interest rates.
“Videotron posted outstanding results again in the first quarter of 2014,” commented Manon Brouillette, President and Chief Operating Officer of Videotron. “Revenues grew $31.8 million or 4.8% and adjusted operating income rose $21.9 million or 7.0%. Average monthly revenue per user (“ARPU”) was $121.72 in the first quarter of 2014, up $7.23 (6.3%) from the same period of 2013. The strong results demonstrated once again Videotron’s ability to deliver the best experience to customers of all its services.”
“Quebecor continued refocusing its news media activities,” said Julie Tremblay, President and Chief Executive Officer of Sun Media Corporation. “Among other things, it withdrew from door-to-door distribution of weekly newspapers and flyers in Québec and discontinued distribution of the Le Sac Plus doorknob bag in January 2014. With respect to results, the News Media segment’s adjusted operating income increased slightly despite an 8.6% decrease in revenues, reflecting the positive impact of the numerous cost‑control and repositioning initiatives taken over the past several years. These initiatives yielded $12.0 million in savings in the first quarter of 2014. The segment will continue focusing on its core businesses and on developing new content that can be brought to all platforms."
“In the Broadcasting segment, TVA Network’s hit show La Voix was a phenomenal success in its second season, comparable to season 1,” said Pierre Dion. “Ratings were exceptional throughout its run from January 19 to April 13, 2014. The weekly gala drew an average audience of more than 2.6 million viewers and an average market share of 56.9%. Under continuing adverse market conditions for traditional media, TVA Group’s conventional and specialty channels had a combined market share of 32.8% during the Winter 2014 season, including 24.2% for TVA Network, more than its two main conventional rivals combined. During the same period, 20 of the 30 top‑rated shows in Québec were on the TVA Network. Adjusted operating income was negatively impacted in the first quarter of 2014 by the decline in advertising revenues, by higher content costs due, among other things, to the Québec election campaign, and by certain non-recurring, retroactive indemnity costs. Finally, to expand its programming, TVA Sports reached long‑term agreements during the quarter with prestigious properties such as Major League Baseball, the Canadian Hockey League and the Quebec Major Junior Hockey League.”
“On the financial front, Videotron issued Senior Notes in the aggregate principal amount of US$600.0 million, bearing interest at an advantageous 5.375% rate, and used a portion of the proceeds to prepay US$260.0 million principal amount of its 9.125% Senior Notes,” reported Jean‑François Pruneau, Senior Vice President and Chief Financial Officer of Quebecor. “Quebecor Media redeemed and prepaid all of its 7.75% Senior Notes in the aggregate principal amount of US$380.0 million. These opportunistic financing transactions by Quebecor Media and Videotron will yield annual debt interest savings of approximately $20.0 million.”
The members of the Board of Directors of Quebecor wish to express their gratitude to Robert Dépatie, who has played an instrumental role in the Corporation’s success for 13 years. They wish him well in his future projects.
“During the first quarter of 2014, Quebecor posted solid consolidated financial results and continued growth in the Telecommunications segment,” said Pierre Dion. “By leveraging all its strengths, Quebecor will continue positioning itself to pursue its business development and profitability targets and create shareholder value.”
For more details and to consult definitions of "adjusted operating income" and "adjusted income from continuing operations", please refer to the attached PDF file for the complete version of the press release.
Senior Vice President and Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
Vice President, Public Affairs
Quebecor Media Inc.