TORONTO – Cost efficiencies and revenue growth helped to drive margin expansion at each of Rogers Communications’ three divisions during the second quarter of fiscal 2010, ended June 30.
Adjusted operating profit rose 11% to $1.2 billion as overall revenue grew 5% to $3 billion, compared to Q2 2009. Net income came in 21% higher at $451 million.
Wireless data revenue growth came in at 39%, while cable total service units (cable + Internet + home phone) grew 25,000 more than the second quarter of 2009.
The company’s media’s portfolio (radio, TV, magazines) posted an 8% revenue increase which, combined with cost cutting measures, saw a 78% adjusted operating profit growth.
Rogers Wireless was fuelled by data revenue growth of 39% and net subscriber additions of 119,000, which is off last year’s subscriber addition pace of 142,000. Wireless data revenue now comprises 27% of wireless network revenue and was helped by the activation and upgrade of approximately 385,000 additional smartphone devices during the quarter, predominantly BlackBerry, iPhone and Android devices, of which approximately 35% were for subscribers new to Wireless, says the company. This resulted in subscribers with smartphones, who generate ARPU nearly twice that of voice only subscribers, representing 35% of the overall postpaid subscriber base as at June 30, 2010, up from 25% as at June 30, 2009.
The company’s numbers were better than was predicted here.
Total service units at Rogers Cable grew by more than 25,000 versus the second quarter 2009 (where the company lost 2,000 units), with Internet subscriber penetration now at 72% of television subscribers and residential voice-over-cable telephony penetration at 42% of television subscribers.
The increase in revenue at Rogers Media (TV assets like Citytv and Sportsnet, mags such as Maclean’s and Flare and 54 radio stations) for the three and six months ended June 30, 2010, compared to the corresponding periods of 2009, reflects improvements in the division’s prime time TV ratings, increased subscriber fees, improvements in the advertising market and in consumer discretionary spending, which together are favorably impacting Television, Sportsnet, Radio and The Shopping Channel revenues. Publishing is also beginning to experience positive growth in advertising revenues for the first time in several quarters, while Sports Entertainment (Toronto Blue Jays and the Rogers Centre) reported modest revenue declines associated with fluctuations in attendance levels.
