Bell’s Q2 profit plunges by 64 per cent

BCE Inc.’s second quarter profit dropped to $294 million, a 64 per cent decrease on a year before, with the company attributing the drop to higher expenses, including $452 million of impairment charges related to some of Bell’s TV and radio properties. The company’s total revenues also declined 9.1 per cent on the year before, dropping from $5.89 billion to $5.35 billion in the second quarter of 2020, with Bell chief financial officer Glen LeBlanc telling analysts on Thursday that drop was driven by a full quarter impact of store closures and reduced consumer activity. The quarter, taking in the three months to June 30, was the first to fully capture the effects of the COVID-19 pandemic, with Bell CEO Mirko Bibic telling financial analysts the results represented “a low water mark” despite it being too early to predict what the company’s recovery would look like. “And although we don’t expect to return to pre-COVID operating performance in the near term, Q3 is anticipated to show a marked improvement,” he said. Bell’s media revenues took the biggest hit, declining 31.2 per cent to $579 million, while wireless revenues declined 11 per cent to $1.92 billion, down from $2.16 billion the year before. Wireline revenues were essentially flat, declining one per cent on the year before, to $3.04 billion. Bibic said that the company was starting to see signs of improvement in the company’s media sector after a decline in advertising revenue due to COVID-19. “Some industries like automotive, retail and food are beginning to spend again, also the return of some key sporting events including PGA tour golf, UFC, Nascar, F1 and MLS Soccer have shown promising results,” Bibic said, adding most events had had higher than usual audiences, something that was expected to continue in the next quarter. Bell had 34,702 net additional wireless subscribers, a 76.8 per cent fall from the 149,478 net additions it posted in the second quarter of 2019. The company now has a total wireless subscriber base of 10.01 million customers, roughly 382,000 more than it did this time last year. Bibic told analysts that store closures and stay at home requirements due to COVID-19 had a “significant impact” on subscriber and promotional activity. Bibic said the company was beginning to see “some pickup in demand” due to the reopening of almost all its retail points of sale, but said it was still too early to know when consumers would resume their typical shopping activity. The company’s average wireless billing per user (ABPU) was down 8.8 per cent on the same time last year, dropping to $62.77, from $68.79 in 2019. Bibic said that result was not unexpected given COVID-19’s impact on roaming revenue, the ongoing decline in data revenue, a growing percentage of prepaid customers and relief measures the company put in place during the pandemic. Bell also posted a drop of 15,554 home television subscribers, a 761.4 per cent drop from the second quarter of 2019 when it added 2,350 subscribers. The bulk of the losses were in satellite, where the company lost 11,940 subscribers, fewer than the 14,425 it lost a year earlier. The company also lost 3,604 IPTV subscribers, a significant drop from the year before when it added 16,775 subscribers to the service. The company posted some 2.74 million total television subscribers, almost 29,000 fewer than it had this time last year. Bibic said the IPTV losses were the result of reduced sales activity and promotional offers, as well as “overall TV market maturity,” but praised the lower satellite TV losses as a good result. Home internet subscriber additions declined two per cent, dropping to 19,023 for the quarter,for a total retail subscriber base of 3.60 million, a 3.9 per cent increase on 2019. -- With reporting by Adam Langenberg at alangenberg@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Bell’s Q2 profit plunges by 64 per cent

News | August 6, 2020

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Bell’s Q2 profit plunges by 64 per cent

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