MONTREAL – While the company’s print division faces down systemic challenges, Quebecor’s cable and telecom unit, Vidéotron, continues to show impressive growth, the company said Tuesday.
Third quarter revenues (ended September 30) at the Quebec company rose 4.4% to $1.06 billion and operating income increased 10.4% to $352.8 million. However, net income attributable to shareholders was $18.6 million ($0.30 per basic share), down 29% compared to the same quarter of 2012.
Videotron saw revenue increases in the third quarter from all services: Internet access revenue rose by 10.5%, cable television by 6.4%, wireless phone by 41.8%) and cable telephony by 3.7%. Operating income went up by 12.5%). The division’s revenue generating units grew by 101,100 in the third quarter of 2012 and by 264,600 (5.8%) in the 12-month period ended September 30, 2012 (an RGU is counted per-service, so a customer with Vidéotron cable, cable phone, internet and wireless would account for four RGUs, for example). Average monthly revenue per user (ARPU) is up by $7.99 (7.7%) to $112.32 in the third quarter of 2012.
The company also took a total non-cash charge of $187 million for impairment of goodwill and intangible assets, reflecting continuing weak market conditions in the newspaper and music industries. The led to the company’s restructuring announcement yesterday of the Sun Media newspaper chain, which will bring $45 million in estimated annual savings.
"We are very satisfied with the growth recorded by Vidéotron in the third quarter of 2012," said Robert Dépatie, president and CEO of Vidéotron in the company’s press release. "Revenues from Vidéotron's main services were all up substantially… It is noteworthy that the cable television subscriber losses recorded in the second quarter of 2012, during the moving season, were almost entirely made up in the third quarter of 2012… Videotron stands out among Canada's major telecommunications carriers with the highest quarterly growth rate in operating income."
"A major event that has occurred since the end of the second quarter of 2012 will mark Quebecor's history: the purchase of part of CDP Capital's interest in Quebecor Media for $1.5 billion," added Jean-Francois Pruneau, CFO, in the release. "This transaction will enable the Corporation to benefit from the growth we anticipate for this subsidiary in the coming years, while continuing its partnership with CDP Capital. It was carried out in accordance to the corporation's fundamental financial objectives of maintaining a sufficient level of operational and financial flexibility. This transaction was a positive for both our financial partner, which has supported us since the creation of Quebecor Media in 2000, and our shareholders."
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