Books a $452 million write-down on Bell Media
MONTREAL – Bell Canada Enterprises reported second quarter operating revenue of $5.35 billion, down 9.1% compared to Q2 2019.
This is of course due to reduced consumer and commercial activity as Covid-19 negatively impacted financial results across all Bell operating segments. Service revenue $4.8 billion was a drop of 7.5% while product revenue fell 20.7% to $554 million.
Net earnings declined 64% to $294 million, largely the result of higher expenses such as the $452 million worth of impairment charges related to certain Bell Media TV and radio properties, and lower adjusted EBITDA, partly offset by lower income taxes, reads the press release.
Adjusted net earnings were $573 million, down 31.8% and adjusted EBITDA decreased 9.4% to $2.33 billion, “driven by declines of 9.2% at Bell Wireless, 5.3% at Bell Wireline and 31.9% at Bell Media,” reads the release.
Total capital expenditures decreased 6.9% to $900 million, due to fewer new customer service installations and less network construction “as Bell continued to focus on stabilizing operations during Covid-19 and ensuring critical service continuity,” reads the release.
All that said, the company is not exactly taking its foot off the gas when it comes to building out new network extensions. Despite the slower spending, we continued to invest in the expansion of our fibre network, launched initial mobile 5G service, and accelerated the rollout of Wireless Home Internet to more rural locations in Québec and Ontario.
On the subscriber front, Bell reported 34,702 net new wireless customers in Q2, surpassing 10 million total wireless subscribers; 19,023 net new retail Internet customers; a net loss of 3,604 IPTV customers; a net loss of 11,940 retail satellite TV customers; and a net loss of 48,405 retail residential phone lines. “These subscriber results are net of provisions recorded due to Covid-19 for non-paying customers who have not been disconnected,” reminds the release.
Wireless and retail Internet, TV and residential NAS connections totaled 18,935,326, up 1.4% over Q2 2019. The total includes 10,012,259 wireless customers, 3,597,219 retail Internet subscribers, 2,738,365 retail TV subscribers, (1,766,430 IPTV customers, an increase of 3.1%, and 971,935 retail satellite TV customers, down 7.8%); and 2,587,483 retail residential NAS lines, down 8.3%.
“Even as the impacts of Covid-19 on all sectors of the economy accelerated in the second quarter, Bell continued to expand our next-generation networks in urban and rural Canada, grew broadband wireless and wireline market share with a focus on customer experience, and delivered the ongoing free cash flow growth that fuels both our investment leadership and BCE’s returns to shareholders,” said Mirko Bibic, president and CEO. “Bell’s performance in Q2 underscored the scale and resiliency of our networks, the strength of our financial foundation, and the Bell team’s success in keeping Canadians fully connected and informed throughout the Covid-19 crisis.”
“Backed by a strong balance sheet and the best networks, Bell’s dedicated and seasoned team is proud to be playing a critical role in Canada’s recovery,” added Bibic. “I’m also proud to highlight how the Bell team has come together to address the wide-ranging impacts of systemic racism and inequality with meaningful action at our company – including new corporate targets for Black, Indigenous and people of colour representation in senior management and young leaders starting their careers – and in our communities, with dedicated Bell Let’s Talk support for racialized Canadians and new partnerships with expert advisors to guide and strengthen our response.”
For more on the company’s Q2, please click here.
