Montréal, Québec – Quebecor Inc. (“Quebecor” or the “Corporation”) today reported its consolidated financial results for the third quarter of 2016. Quebecor consolidates the financial results of its Quebecor Media Inc. (“Quebecor Media”) subsidiary, in which it holds an 81.1% interest.
Third quarter 2016
- Revenues: $998.3 million, up $23.8 million (2.4%).
- Adjusted operating income $389.8 million, down $1.6 million (‑0.4%), including a $10.7 million unfavourable variance in the consolidated stock‑based compensation charge.
- Net loss attributable to shareholders: $8.3 million ($0.07 per basic share) in the third quarter of 2016, compared with net income attributable to shareholders of $85.1 million ($0.69 per basic share) in the same period of 2015, a decrease of $93.4 million ($0.76 per basic share), including the $119.6 million unfavourable impact of losses and gains on embedded derivatives related to convertible debentures.
- Adjusted income from continuing operating activities $83.2 million ($0.68 per basic share) in the third quarter of 2016, compared with $74.0 million ($0.60 per basic share) in the same period of 2015, an increase of $9.2 million ($0.08 per basic share) or 12.4%.
- The Telecommunications segment grew its revenues by $39.5 million (5.2%) and its adjusted operating income by $12.5 million (3.6%) in the third quarter of 2016.
- Videotron Ltd. (“Videotron”) significantly increased its revenues from mobile telephony ($27.6 million or 25.9%), Internet access ($14.3 million or 6.2%), business solutions ($10.6 million or 59.6%) and the Club illico over‑the‑top video service (“Club illico”) ($1.9 million or 32.2%).
- Videotron’s average monthly revenue per user (“ARPU”) was up $9.64 (7.0%) from $136.94 in the third quarter of 2015 to $146.58 in the third quarter of 2016.
- Net increase of 54,700 revenue‑generating units1 (1.0%) in the third quarter of 2016, including 38,800 connections to the mobile telephony service, 24,400 subscriptions to the cable Internet access service and 12,200 memberships in Club illico.
Quebecor’s revenues were up $23.8 million (2.4%) in the third quarter of 2016, reflecting a strong performance by its Telecommunications segment, which grew its revenues by 5.2%,” commented Pierre Dion, President and Chief Executive Officer of Quebecor. “Once again, Videotron’s rising numbers were driven by products and services with strong growth prospects. Consumer response to Videotron’s offerings continues to be very positive. For example, its mobile telephony service posted a net increase of 38,800 subscriber connections, bringing the total to 867,700 as of September 30, 2016. Videotron now ranks among the mobility leaders in Québec. Videotron’s cable Internet service added 24,400 customers during the quarter. In Quebecor’s consolidated results, the $9.2 million (12.4%) increase in adjusted income from continuing operating activities is noteworthy.
During the 12‑month period ended September 30, 2016, our mobile telephony service added 125,200 subscriber connections, a 16.9% increase, noted Manon Brouillette, President and Chief Executive Officer of Videotron. “Those gains were accompanied by a significant increase in the mobile service’s ARPU, which was $52.61 in the third quarter of 2016, a 7.2% year‑over‑year increase. Development of our Internet access and business solutions services continued to make a positive contribution to our results. In this regard, on July 13, 2016, we launched our Giga Fibre Hybrid service, which delivers speeds of up to 940 Mbps to residential and business customers and maintains our leadership in very high speed Internet access. On September 13, 2016, we also opened the 4Degrees Colocation Inc. data centre in Montréal, which is equipped with one of the largest server rooms in Québec and is purpose‑designed to meet our business customers’ hosting needs.
On September 20, 2016, Videotron announced a partnership with Ericsson Canada Inc., École de technologie supérieure and Quartier de l’innovation de Montréal to create the first open‑air smart living laboratory in Canada. It will serve to test all aspects of new, fifth‑generation telecommunications technologies. We are very proud that we were able to bring these eminent partners together in the common purpose of building an innovation ecosystem in Montréal. For Videotron, this lab will be an additional tool for identifying applications and services that can make life easier for consumers and create value for businesses, concluded Manon Brouillette.
In a changing industry environment, Quebecor’s Media segment announced on November 2, 2016 an organizational transformation designed to balance its cost structure and enhance operational efficiencies, which will enable it to maintain its lead in news and content production and continue promoting its flagship brands, said Julie Tremblay, President and Chief Executive Officer of Quebecor Media Group. “Those initiatives will entail the elimination of 220 positions, or nearly 8% of our workforce.
“The industry has been disrupted in Québec as in the rest of the world, and we have therefore made a number of transformational moves in order to adapt to the changes. The downtrend in advertising revenues impacted the Media segment’s operating profits again in the third quarter of 2016. However, our broadcasting business was boosted by an increase in the advertising revenues of the TVA Sports specialty service, mainly because of coverage of the 2016 World Cup of Hockey tournament.
In keeping with its commitment to innovation, on October 24, 2016 the Media segment launched the new TVA.CA website and the TVA mobile app, which give users free access to TVA programs in high definition, live or on demand, added Julie Tremblay. “The initiatives were part of TVA Group’s strategy to expand its presence in new media and webcasting in order to meet consumers’ needs and offer advertisers a new vehicle.”
In the Sports and Entertainment segment, the Videotron Centre marked its first anniversary on September 12, 2016. During its first year of operation, the facility hosted 93 sporting events and concerts, as well as 30 corporate events. In all, more than 1.1 million people passed through the turnstiles.
In the first nine months of 2016, Quebecor continued implementation of its business plan, focused on areas with strong growth potential. The Corporation remains well positioned to achieve its profitability, business development and shareholder value‑maximization objectives, Pierre Dion concluded.
1 - The sum of subscriptions to the cable television, cable Internet access and Club illico services, plus subscriber connections to the cable and mobile telephony services.
For more details and to consult definitions of "adjusted operating income", "adjusted income from continuing operating activities" and "average monthly revenue per user", 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.