TORONTO – Gains in its wireless and media division helped to boost second quarter profits at Rogers Communications by 9%, the company announced Thursday.
For the period ended June 30, 2016, net income of $394 million and adjusted net income of $427 grew from $363 million and $412 million respectively year-over-year, primarily as a result of higher adjusted operating profit and lower other expense, partially offset by higher depreciation and amortization. Net income also benefitted from lower restructuring costs.
Consolidated revenue increased 2% to $3.46 billion this quarter, reflecting revenue growth of 1% in Wireless, 6% in Media, and 3% in Business Solutions, with flat revenue in Cable. Wireless service revenue increased by 5% primarily as a result of a larger subscriber base and the continued adoption of higher-postpaid-ARPA-generating ‘Rogers Share Everything’ plans. Cable revenue was stable as continued double-digit Internet revenue growth of 15% fully offset the ongoing decline in Television and Phone revenue. Media revenue increased primarily due to the continued success of the company’s sports-related assets, mainly from the Toronto Blue Jays and Sportsnet, partially offset by lower advertising revenue in conventional broadcast television, publishing, and radio.
Free cash flow was up 4% to $495 million from $476 million last year, which the company said reflects an increase in adjusted operating profit and lower cash tax payments, partially offset by higher additions to property, plant and equipment.
Rogers reported 65,000 Wireless net postpaid additions this quarter, an improvement of 41,000 over the same period last year, which it said were results of its strategic focus on enhancing the customer experience by providing higher-value offerings, such as the Share Everything plans, improving its customer service, and continually increasing the quality of its network.
The company ended the quarter with 8.35 million wireless postpaid customers and 1.61 million prepaid customers, up 187,000 and 17,000, respectively from the same period last year. On the TV side, Rogers lost 23,000 cable customers to fall to 1.85 million; added 12,000 Internet customers to sit at 2.07 million broadband subs; and added 5,000 home phone customers and now has 1.08 million of those households.
"We posted strong results in the second quarter, delivering solid revenue growth whilst attracting more customers across our Wireless and Internet businesses," said president and CEO Guy Laurence, in the earnings’ news release. "We continued to make meaningful improvements to the customer experience, delivering our third straight quarter of Wireless postpaid churn improvement. We expanded our roaming leadership with the launch of Fido Roam, continued the rollout of our Gigabit Internet service to almost half our cable footprint, and introduced two innovative leapfrog solutions to Canadian businesses. Overall, we're making good headway on our Rogers 3.0 strategy."
