Helped by Fizz, Quebecor reports strong Q4 earnings

Quebecor Inc. has continued to grow its revenues in spite of the ongoing COVID-19 crisis, according to the company’s quarterly earnings report, while adding significantly to its dividend price. In the fourth quarter of 2020 (the three months ending December 31), Quebecor’s total revenues were $1.15 billion, a $10.6 million (or 0.9 per cent) increase from the same period in 2019. Profits increased by $18.2 million compared to Q4 of 2019, to a total of $168.5 million. The company’s dividends jumped sharply, though, from $0.20 per share per quarter to $0.275 — a 38 per cent increase. The revenue increase was driven by Quebecor’s telecommunications sector, where revenues were up $32.3 million from the same time last year (3.6 per cent) — most notably, Videotron saw a 51.6 per cent increase in revenue from equipment sales (up $139.1 million), although this was mostly attributed to the rollout of Videotron’s IPTV service, Hélix. There was also a 9.6 per cent ($57.8 million) revenue increase in mobile telephony. Quebecor CEO Pierre Karl Péladeau credited much of this increase to Videotron flanker brand Fizz, which “ our wireless growth”. Meanwhile, Quebecor’s revenues from its media division tumbled by 11.9 per cent ($87.5 million), mostly due to the pandemic, although Peladeau noted some cost-saving upsides that had stemmed from the crisis. “The impact of the pandemic was of course much heavier on our media segment, with a significant slowdown in advertising revenues across platforms but also a reduction in programming, content, and production costs. The postponement of content and sports rights as well as the receipt of government subsidies which all in all carried down to a net improvement of our media profitability.” Canaccord analyst Aravinda Galappatthige noted that Quebecor’s media segment performed substantially higher than expected, with its EBIDTA actually increasing by just over $10 million to $45.6 million this quarter. “We suspect this quarter was also supported by CEWS and lower programme amortization due to postponed sporting events,” he wrote. Quebecor’s Sports and Entertainment revenue also dropped by 17.8 per cent ($34.2 million) with Péladeau noting that the segment had been “for all intents and purposes, idle” as a result of the pandemic. Quebecor’s fourth quarter strengths were spread across its telecommunications offerings, with a net increase in new subscribers across all main offerings except wireline TV and phone service. The company added 28,500 wireless subscribers (about one-third lower than the 41,800 added in Q4 2019). Videotron’s internet services were a high point, with 27,000 new subscribers — nine times higher than the 3,000 added at the same point last year, a result deemed “impressive” by Canaccord analysts. Videotron’s Cable TV subscriptions dropped by a lower rate than expected, with a loss of 6,200 subscribers — less than half the number shed in Q4 2019. Wireline phone subscriptions fell by 23,100, roughly in line with expectations. Videotron’s over-the-top streaming service Club Illico also fared well, increasing its subscriber count by 16,800 compared to the previous quarter, a 3.7 per cent increase. Videotron’s average revenue per user (ARPU) dropped again, thanks to a loss of overage and roaming revenues due to COVID-19 stay-home orders — in the fourth quarter, it was $50.52, a 2.6 per cent decrease from $51.89 in Q4 2019. Videotron President and CEO Jean-François Pruneau gave further explanation, noting that Videotron’s annual price increases (which usually take place in March) did not happen in 2020, in turn keeping the ARPU from rising. Those increases will happen in 2021, Pruneau said. — Reporting by Tim Forster at tforster@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Helped by Fizz, Quebecor reports strong Q4 earnings

Broadcast | February 25, 2021

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Helped by Fizz, Quebecor reports strong Q4 earnings

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