MONTREAL – "Quebecor Media posted a very strong performance in 2005, spearheaded by surging results at Videotron, driven by positive consumer response to its products, particularly the residential telephone service, market acceptance of which has exceeded all our expectations," Pierre Karl Peladeau, president and CEO of Quebecor Inc., said today in announcing the company’s fourth quarter and year-end financial results.
Quebecor Media Inc’s revenues were up $240.5 million on the year while, operating income rose $36.4 million in 2005. Videotron’s annual revenues break through the $1 billion mark for the first time. Besides Videotron, QMI also includes TVA Group and Sun Media, among other assets.
Videotron’s customer growth in 2005, ended December 31st, was:
* 163,000 customers for new cable telephone service
* 135,400 more customers for cable Internet access (an annual growth record)
* 140,900 more customers for illico digital TV (also a record)
* 53,500 more customers for all cable television services combined (best performance since 1999).
The revenues of Quebecor Inc., including its large, struggling printing empire, for the 2005 financial year totalled $10.21 billion, a decrease of $404.9 million (3.8%) compared with 2004. The $240.5 million revenue increase at Quebecor Media did not entirely make up for a decrease at Quebecor World due mainly to the impact of conversion into Canadian dollars. Quebecor’s operating income declined $187.8 million (-10.9%) to $1.54 billion in 2005. A $36.4 million increase in operating income at Quebecor Media did not offset a $225 million (US$129.8 million) decrease at Quebecor World, says the company’s press release.
"Quebecor’s revenues and operating income were again negatively affected by softness in the print media markets in which Quebecor World operates," added Peladeau. "The impact was amplified by the conversion of Quebecor World’s results into Canadian dollars. In response to the difficult business environment, Quebecor World continued developing strategies to improve the performance of its facilities. It initiated investments that will amount to US$580 million to modernize its manufacturing platform in North America and Europe, and pressed ahead with restructuring initiatives. It also completed the sale of its non-core North American Commercial group. Finally, on the financial front, Quebecor Media completed the refinancing of nearly all its Notes in January 2006. The process will reduce its annual interest expense by approximately $80.0 million."
Quebecor Media’s net income increased by $8.3 million (9.4%) from $88.2 million in 2004 to $96.5 million in 2005. The higher operating income and lower financial expenses outweighed the recording in 2005 of a $60 million loss on debt refinancing. Quebecor World’s net loss totalled US$202.2 million (US$1.53 per basic share) in 2005, compared with net income of US$106.2 million (US$0.80 per basic share) in 2004. The difference was due primarily to a US$243.0 million write-down of goodwill and the decrease in operating income.
