HALIFAX – Despite growth in its fibre-to-the-home product FibreOp, a drop in Bell Aliant’s profits resulted in “softer” third quarter results.
Bell Aliant Inc. reported net earnings of $81 million for the third quarter ended September 30, 2013, down $7 million from the third quarter of 2012.
Operating revenues of $695 million decreased 0.4% from the same quarter last year as growth in TV, Internet, other data, wireless and other revenues were offset by declines in local and long distance revenues.
Operating expenses of $368 million in the period were up 1.4% year-over-year, largely due to growth in TV content, marketing and customer support costs from a growing FibreOP customer base, and the timing of management incentive accruals, which were somewhat offset by expense reductions throughout the business. As a result, EBITDA of $327 million declined by 2.2% compared to the same quarter in 2012.
Revenues for Bell Alliant’s IPTV, Internet, and wireless business segments each grew by $12 million (56.1%), $6 million (4.8%), and $1 million (3.2%), respectively.
Bell Aliant passed an additional 45,000 premises with FTTH this quarter compared to 47,000 in the third quarter of 2012, bringing total FTTH coverage to 770,000 premises at the end of September 2013.
FibreOP TV added 16,300 net new customers in the quarter to reach 142,100, a portion of which were migrations from Bell Aliant's fibre-to-the-node (FTTN) TV service. Overall net IPTV customer additions were 14,500, a 19% increase compared to 12,300 a year earlier. Total IPTV customers reached 163,300 at the end of September 2013.
FibreOP Internet customer net additions in the quarter were 19,300, bringing total FibreOP Internet customers to 166,000 at the end of September 2013. FibreOP Internet additions include existing Bell Aliant customers migrating from DSL and FTTN networks to the upgraded service.
Overall net high-speed Internet customer additions were 11,600 in this quarter, up 55% from 7,500 last year, bringing total high-speed Internet customers to 944,900 at the end of September 2013.
Net NAS declines of 33,700 were up 1,300 from the same quarter in 2012, a result of competitive activity and technology substitution.
“Pricing activity that occurred later in 2012 and expense recognition timing differences benefitted the year-over-year comparisons of earlier quarters this year, without similar benefits in the third quarter”, said president and CEO Karen Sheriff, in the news release. “Also, our response to aggressive competitive activity in the third quarter, while helping to improve our customer activation performance, caused our costs in the quarter to increase, and thereby contributed to softer year-over-year financial performance in the quarter.”
Sheriff added that the company was well positioned to achieve its previously announced financial guidance for fiscal 2013.
Bell Aliant declared a quarterly dividend of $0.475 per common share, payable on December 31, 2013, to shareholders of record at the close of business on December 13, 2013.
