Rogers eying changes to federal immigration policies, tariff dispute heading into 2025

Leading into 2025, Rogers Communications Inc. CEO Tony Staffieri says attention must be paid to a difficult-to-predict political environment in Canada and the United States. Rogers on Thursday, Jan. 30 reported a three per cent increase in revenue for its fourth and final quarter of fiscal 2024, up to $5.48 billion from $5.33 billion in Q4 2023. It also reported a 70 per cent spike in profit, reaching $558 million compared to $328 million the year prior. The company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) increased as well, up by nine per cent to $2.53 billion from nearly $2.33 billion last year. It finished the quarter ended Dec. 31, 2024 with free cash flow of $878 million, up seven per cent from $823 million in the same period of 2023. When asked by analysts on an investors’ call Thursday about how Rogers anticipates a potential federal Conservative government could impact the company, Staffieri said it is “too difficult and speculative” to guess what policies a new government might implement or how quickly they might do it. Staffieri additionally said that considerations must be paid to an unpredictable political environment in general. “We think about, and have thought about, some of the broader macroeconomic factors that could impact us, including some of the recent discussions around tariffs with our U.S. neighbour, and so those are the factors that we put into models,” he said. “There are headwinds as well from time to time, particularly in competitive periods. In terms of our competitors, looking to leverage price above other factors, we've pivoted to product differentiation and network superiority as increasingly our lead. We'll lean on price when we need to, but that's our strategy…,” Staffieri said. Rogers’ chief financial officer, Glenn Brandt, told analysts that he would not speculate on what might happen in regards to the potential tariff dispute between Canada and the U.S., saying it is up to others to “manage the stewardship of the Canadian economy and how we respond to the international realities. “I'm confident that the Canadian economy is strong and weathers these from time to time, and we'll come out the other side,” he said. Roger’s report outlines expectations of “healthy total service revenue” in 2025, so far anticipating it to fall somewhere between equal with 2024 to up by three per cent. Overall revenues for 2024 as a whole were up seven per cent to $20.6 billion from $19.3 billion in fiscal 2023. Net income was up 104 per cent to $1.73 billion from $849 million. The company credited the rise in total revenue in the fourth quarter, in particular, to growth in its wireless and media businesses, and noted “stabilized” revenue in its cable business. Wireless revenue accounted for the majority of what Rogers made in the quarter, coming in at $2.98 billion – a four per cent increase from $2.86 billion in Q4 2023. Rogers noted an increase in the number of customers buying “higher-value” devices as it observed a nine per cent increase in wireless equipment revenue. Its total equipment revenue was $923 million, up from $848 million. The company reported a net drop in postpaid mobile phone customer adds of 115,000 during the quarter, down to 69,000 adds. Its total postpaid mobile phone subscribers by the end of the quarter was 10.76 million, up by 270,000. Its monthly churn was 1.53 per cent, down from 1.67 per cent the year prior. Rogers credited the slowdown to a less active market, slowing population growth due to changes to government immigration policies, and its “focus on attracting subscribers to our premium 5G Rogers brand.” Monthly mobile phone ARPU (average revenue per user) was $58.04, up by eight cents from $57.96. Cable revenue was $1.98 billion, unchanged from the year prior. Net customer adds were 14,000, an increase of 15,000 from a net loss of customers last year. The number of homes passed by Rogers increased by 262 per cent to 10.2 million from 9.94 million. Retail internet subscribers totaled 4.27 million by the end of the quarter, up from 4.16 million. Total video subscribers were down to approximately 2.61 million from 2.75 million. Home phone subscribers also tumbled, down to 1.5 million from nearly 1.63 million, while home monitoring customers were up to 133,000 from from 89,000. Media revenues were up 10 per cent to $616 million in the quarter, which the company ties, in part, to higher sports and entertainment revenue that it notes was “lower than expectations as previously announced.” Sports league and CRTC approvals for Rogers’ acquisition of Bell’s 37.5 per cent stake in Maple Leaf Sports & Entertainment (MLSE), announced last September, are still pending, the company noted in its report, before the deal can close. Pressed for details by analysts, Staffieri said “to be clear, our intent is to close on the MLSE transaction once we receive those approvals, and we're comfortable with the ability of our funding strategy for that to to work within our balance sheet and remain investment grade.” As far as expected benefits from the deal. Staffieri said Thursday that, as the largest distributor of sports content in Canada, “we have the unique ability to look at the whole ecosystem, from sports ownership all the way to the viewing experience of the consumer – whether it's in their home or on their mobile device – and we think that's a huge opportunity for us to capitalize on.” The company briefly touched on its plan to sell a stake in part of its wireless backhaul infrastructure for $7 billion. Rogers reiterated in its report that the equity investment, “if completed,” would mean the investor – which has not been officially named, but was reported by The Globe and Mail to likely be American investment firm Blackstone Inc. – will acquire a minority stake in a subsidiary that would own part of Rogers’ wireless backhaul infrastructure, while the company would hold onto operational control. In its report, Rogers reiterated that “substantially all” of the net proceeds from that deal are expected to be used to reduce its debt and “further strengthen our balance sheet. “Definitive agreements” for that deal are still in the works, Rogers said. hdaley@thewirereport.ca

Rogers eying changes to federal immigration policies, tariff dispute heading into 2025

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By Hannah Daley
| January 30, 2025

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