MONTREAL – BCE said Thursday that its “strong wireless execution” in the first quarter of 2019 helped to generate gains in revenues and profits.
For the period ended March 31, 2019, BCE saw operating revenues increase 2.6% to $5.73 billion. Service revenue grew 1.6% to $5.05 billion and product revenue increased 10.1% to $689 million, which the company said reflects increases at Bell Wireless and Bell Wireline, partly offset by a slight year-over-year revenue decline at Bell Media.
Net earnings jumped 11.6% to $791 million and net earnings attributable to common shareholders grew 12.0% to $740 million. Higher net earnings and net earnings per common share were the result of growth in adjusted EBITDA and higher other income, driven mainly by net mark-to-market gains on derivatives used to economically hedge equity settled share-based compensation plans. This was moderated by higher depreciation, finance costs, income taxes, and severance, acquisition and other costs.
Excluding severance, acquisition and other costs, net mark-to-market losses on derivatives used to economically hedge equity settled share-based compensation plans, net gains on investments, early debt redemption costs and impairment charges, net of tax and non-controlling interest, adjusted net earnings dipped to $692 million from $719 million in Q1 of last year.
BCE’s adjusted EBITDA grew 6.9% to $2.41 billion in Q1, driven by year-over-year increases of 11.6% at Bell Wireless, 2.0% at Bell Wireline and 26.9% at Bell Media. The company’s consolidated adjusted EBITDA margin increased to 42.0% from 40.3% in Q1 2018, reflecting the high flow-through of wireless and wireline revenue growth, increasing broadband Internet scale, and the favourable year-over-year benefit on adjusted EBITDA from the application of accounting standard IFRS 16.
In the quarter, BCE added 50,204 net new wireless postpaid subscribers and a net loss of 11,922 wireless prepaid subscribers; 22,671 net new retail Internet customers; 20,916 net new IPTV customers; and a decrease of 22,476 net retail satellite TV customers. Retail residential NAS line net losses totalled 66,779. Beginning this quarter, the company said that it is no longer reporting wholesale subscribers in its Internet, TV and residential NAS subscriber bases, due to its focus on the retail market.
BCE added that customer connections across its wireless and retail Internet, TV and residential NAS totalled 18,582,126 at the end of Q1, up 1.0% over last year. The total included 9,480,835 wireless customers, up 3.1% (including 8,808,189 postpaid customers, an increase of 4.0%); 3,442,411 retail Internet subscribers, up 3.9%; 2,764,851 retail TV subscribers, up 1.1% (including 1,696,622 IPTV customers, an increase of 7.5%); and 2,894,029 retail residential NAS lines, down 8.5%.
George Cope, president and CEO of BCE and Bell Canada, highlighted the quarter’s 1.07% postpaid customer churn rate, the lowest in 15 years.
"Consistent strategic execution across our wireless, wireline and media growth segments delivered growth in revenue, adjusted EBITDA – representing our 54th consecutive quarter of year-over-year adjusted EBITDA growth – and free cash flow,” Cope said in a statement. “Canada's best national mobile network attracted 50,000 net new postpaid wireless customers and supported higher data usage and revenue per customer, delivering revenue growth of 4.5%, 11.6% higher adjusted EBITDA and our best churn performance since 2004.”
Click here for BCE’s full financial results for Q1 2019.
