MONTREAL – BCE announced a net profit of $571 million in Q2 2013 Thursday, a drop of 22% compared to the same period last year, despite increased revenues driven by post-paid wireless subscriber growth and an influx of Fibe TV subscribers.
Operating revenues for Bell (which includes Bell wireless, wireline and Bell Media segments) were at $4.42 billion, an increase of 1.95% over Q2 2012, reflecting increases in service revenues (1.8%) and product revenues (2.9%) during the second quarter.
BCE’s net earnings attributable to common shareholders were $571 million in Q2 2013, or $0.74 per common share, compared to $732 million, or $0.94 per common share, in Q2 2012.
In a release, the company attributed the year-over-year decrease in net profit to “losses on equity derivative contracts entered into to economically hedge future payments under our share-based compensation plans, and increased interest expense related to the financing of our acquisition of Astral.”
Bell’s wireless operating revenues increased 5.4% to $1,442 million in the quarter compared to $1,368 million in Q2 2012.
Service revenues were up 6.1% to $1,328 million driven by postpaid subscriber growth and higher blended ARPU reflecting increased data usage and revenues from greater smartphone penetration. Wireless data revenue grew 21.1% in Q2 and now represents more than 40% of total wireless service revenues.
As a result, wireless EBITDA increased 8.9% to $609 million.
Wireline revenue, meanwhile, at $2.51 billion, managed to slow its decline to 0.9% compared to the same period in 2012, thanks to growth in Fibe TV and internet. Of that figure, wireline data revenue accounted for $1,456 million, which increased year-over-year by 4%.
Bell Fibe TV added 50,555 net new customers, a 31.4% increase over the 38,477 gained in the second quarter of 2012, which the company said has been the best quarterly performance since launching the service in 2010. Those additions brought the total of Fibe TV subscribers to 346,316 in Q2, more than double the 158,324 subscribers reported at the end of Q2 2012.
Bell’s Fibe TV offset the decline in voice revenues, reflecting fewer NAS landline losses compared to Q2 2012.
Combined Bell Satellite TV and Fibe TV net additions in the quarter increased 52.8% to 25,605. Bell TV’s subscriber base totalled 2,195,559 at the end of Q2 2013, representing a 3.2% increase since the end of Q2 2012.
“We delivered a solid set of financial results in Q2, backed by continued wireless postpaid strength along with good operational progress in our wireline business and a strong contribution from our media business,” said Siim Vanaselja, CFO for BCE and Bell.
Bell Media revenues grew 4.7% to $559 million in the quarter, due to subscriber fee revenue growth of 7.9% reflecting increases in specialty TV rates paid by broadcast distributors. As a result of higher operating revenues, Bell Media EBITDA increased 3.3% to $156 million.
BCE also boosted its 2013 financial guidance for its Bell business on the strength of closing the Astral Media acquisition in July. It is now forecasting revenue growth of 2% to 4%, up from February’s estimate of 0% to 2%. EBITDA growth is now forecast at 3% to 5%, up from 1% to 3%.
