Montréal, Québec – Quebecor Inc. (“Quebecor” or “the Corporation”) today reported its consolidated financial results for the first quarter of 2015 and announced a 40% increase in its quarterly dividend. Quebecor consolidates the financial results of its Quebecor Media Inc. (“Quebecor Media”) subsidiary, in which it holds a 75.4% interest.
First quarter 2015
- Revenues: $948.6 million, up $50.8 million (5.7%) from first quarter 2014.
- Adjusted operating income: $339.0 million, up $4.3 million (1.3%).
- Net income attributable to shareholders: $29.4 million ($0.24 per basic share) in first quarter 2015, compared with $39.1 million ($0.32 per basic share) in the same period of 2014, down $9.7 million ($0.08 per basic share).
- Adjusted income from continuing operations : $40.8 million ($0.33 per basic share) in first quarter 2015, compared with $44.3 million ($0.36 per basic share) in the same period of 2014, down $3.5 million ($0.03 per basic share).
- Quarterly dividend on the Corporation’s Class A Multiple Voting Shares (“Class A Shares”) and Class B Subordinate Voting Shares (“Class B Shares”) increases 40% from $0.025 to $0.035 per share.
- Telecommunications segment’s revenues up $38.4 million (5.3%); its adjusted operating income up $7.7 million (2.3%) despite the unfavourable impact of one-time items totalling $4.6 million. Videotron Ltd. (“Videotron”) grows its mobile telephony revenues by $27.7 million or 44.9% and its Internet access revenues by $13.4 million or 6.4%.
- Videotron’s average monthly revenue per user (“ARPU”) up $10.24 (8.4%) from $121.72 in first quarter 2014 to $131.96 in first quarter 2015, including a $6.01 (15.0%) increase for mobile telephony service, the strongest quarterly growth since the service was launched in 2010.
- Revenue-generating units1: net increase of 28,000 in first quarter 2015 compared with 17,700 in the same period of 2014. During the 12‑month period ended March 31, 2015, the total number of revenue-generating units increased by 247,400 (4.7%), including increases of 139,600 subscriber connections to the mobile telephone service and 117,000 subscriptions to the over‑the‑top video service.
- On March 25, 2015, the Competition Bureau approved the sale of Quebecor Media’s English-language newspaper businesses in Canada. The transaction closed on April 13, 2015 for a total cash consideration of $305.5 million, consisting of the $316.0 million selling price less $10.5 million for customary adjustments and adjustments related to the sale of real estate properties by Sun Media Corporation.
- On April 12, 2015, TVA Group Inc. (“TVA Group”) closed the acquisition of 14 magazines, 3 websites and custom publishing contracts from Transcontinental Inc. (“Transcontinental”) for a cash consideration of $55.5 million. The transaction was approved by the Competition Bureau on March 2, 2015.
- On March 6, 2015, the Québec Court of Appeal ruled in favour of Videotron and TVA Group, and ordered Bell ExpressVu Limited Partnership (“Bell ExpressVu”), a subsidiary of Bell Canada, to pay them compensation totalling $135.9 million for having neglected to implement an appropriate security system to prevent piracy of the signals broadcast by its satellite television service between 1999 and 2005, thereby harming its competitors and broadcasters. Early in May 2015, Bell ExpressVu applied for leave to appeal the judgment to the Supreme Court of Canada. A decision on its application is pending.
Quebecor grew its revenues by $50.8 million (5.7%) and its adjusted operating income by $4.3 million (1.3%) in the first quarter of 2015,” noted Pierre Dion, President and Chief Executive Officer of Quebecor. “Once again, the improvement was due to the excellent performance of the Telecommunications segment’s operations.
“During the first quarter, we closed the sale of our English-language newspaper businesses in Canada for a total cash consideration of $305.5 million. The sale scaled back our investment in the newspaper industry, in keeping with our strategy of refocusing our operations on our main growth businesses. We also pursued our revenue-diversification and consolidation strategy in our Media segment by closing the acquisition of magazines from Transcontinental.”
“In the first quarter of 2015, the Telecommunications segment generated strong returns once again,” commented Manon Brouillette, President and Chief Executive Officer of Videotron. “We increased our revenues by $38.4 million (5.3%). Our adjusted operating income was up $7.7 million (2.3%), despite the $4.6 million combined unfavourable impact of one‑time items. These results were driven by, among other things, the solid performance of our mobile telephony and Internet access services.
“It is worth noting that the mobile telephony service’s ARPU increased by $6.01 per month (15.0%) in the first quarter of 2015, a historic high since the service was launched in 2010. This success stems from our optimal combination of plans, mobile content and devices on our ultra-powerful network, an LTE network that covers nearly 90% of Québec’s population and supports speeds of up to 150 Mbps.Videotron’s total ARPU for all services increased by $10.24 (8.4%) in the first quarter of 2015.
“Videotron increased its revenue-generating units by 247,400 over the 12-month period ended March 31, 2015. The mobile telephony service added 139,600 subscriber connections, including 29,300 in the first quarter of 2015, compared with 18,200 in the same period of 2014. The Club illico over-the-top video service, which still offers the largest selection of unlimited, on-demand French-language content in Canada, added 117,000 customers.”
On April 7, 2015, the Québec City amphitheatre officially became the Videotron Centre. Videotron is proud to associate its name and brands with the future Québec City icon. “The relationship between the Québec City arena and Videotron is a natural partnership which reflects our attachment to the city,” said Manon Brouillette. “Meanwhile, for the 10th consecutive year, Videotron was rated the most respected telecommunications provider in Québec by the Léger survey, and for the second consecutive year it was ranked the most influential telecommunications brand in Québec on the 2015 Ipsos-Infopresse index.We are very proud of these achievements.”
“Since the beginning of 2015, the Media segment has scored a string of mass-audience successes,” said Julie Tremblay, President and Chief Executive Officer of Media Group. “The sixth and final game of the Montréal Canadiens-Ottawa Senators playoff series, played on April 26, 2015, was seen by a record audience of 1,725,000 on the TVA Sports specialty channel, a 40.3% market share. Since TVA Sports began carrying National Hockey League hockey, its subscriber base has swelled to more than 2.0 million. In our variety programming, season 3 of La Voix on the TVA Network set new ratings records; the weekly galas have drawn an average of 2,787,000 viewers for an average 59% market share.
“In the growing digital media field, the journaldemontreal.com site saw a 72% increase in traffic on all platforms between July 2014 and February 2015, including a 142% increase on cell phones and tablets, compared with a 2% decline for its main rival’s platforms. The larger number of visits to the Journal de Montréal website was due in large part to heavier traffic from mobile devices. The print editions of Le Journal de Montréal, Le Journal de Québec and 24 heures are very strongly positioned in their respective markets and are read by nearly one out of two adults in the Montréal and Québec City metropolitan areas, according to the 2014 PMB and NADbank surveys.”
In the Sports and Entertainment segment, on April 2, 2015, Quebecor Media announced an 8‑year strategic partnership with AEG Facilities, the world leader in sports and entertainment venue management. The AEG Live division will support the Sports and Entertainment segment in booking events, shows and tours for the Videotron Centre, which is slated to open officially on September 11, 2015.On April 28, 2015, the Sports and Entertainment segment and Labatt Breweries of Canada announced a partnership designating Labatt as the Videotron Centre’s official beer supplier.
Finally, the Videotron Centre’s program for its first month was unveiled in April and the first scheduled events, a preseason game between the Montréal Canadiens and the Pittsburgh Penguins, and a Metallica concert, are already sold out. Other events in September will include an opening gala, two Remparts de Québec hockey games, a Madonna concert, a show by Rock et Belles Oreilles, and a boxing card.
“We want to emphasize that the 40% increase in the quarterly dividend on Class A Shares and Class B Shares reflects confidence on the part of the Board of Directors and the management team in the Corporation’s future growth and solid financial position,” said Jean‑François Pruneau, Senior Vice President and Chief Financial Officer of Quebecor. “It should also be noted that the Board will review the dividend policy annually on the basis of anticipated future cash flows.”
“In the first months of 2015, Quebecor continued focusing on implementation of its business plan in its growth sectors, including mobility, Internet services, business services and its new Sports and Entertainment segment,” said Pierre Dion. “It remains strongly positioned to achieve its development, growth and profitability objectives going forward."
1 - The sum of subscriptions to the cable television, cable Internet access and over-the-top video services, plus suscriber connections to the cable and mobile telephony services.
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.