MONTREAL – A $62.9 million revenue increase at Quebecor Media Inc. (home to TVA and Videotron, among other assets) helped offset a decrease at printing division Quebecor World, as the mother corp. reported its first quarter Wednesday.
Quebecor Inc. recorded revenues of $2.59 billion in the first quarter of 2005, essentially unchanged from the same period of the previous year, said the press release. Quebecor generated $360.2 million in operating income in Q1 ’05, a 2.6% decrease.
The $19.7 million (15%) increase in Quebecor Media’s operating income did not fully offset the US$9.2 million (5.1%) decrease at Quebecor World combined with the unfavourable impact of translation into Canadian currency, which has grown in strength compared to the U.S. buck.
"Quebecor Media continued to register impressive growth in revenues and operating income during the quarter, despite significant investments in new services and market development," said Pierre Karl Peladeau, president and CEO of Quebecor Inc.
Quebecor incurred a net loss of $23.6 million ($0.37 per basic share) in the first quarter of 2005, compared with net income of $5.2 million ($0.08 per basic share) in the same period of 2004. The decrease was due primarily to a $34.6 million increase in the reserve for restructuring, to a $33.6 million unrealized loss on re-measurement of exchangeable debentures, and, to a lower extent, to reduced operating income.
Quebecor Media generated quarterly net income of $12.8 million, compared with a net loss of $4.7 million in the same period last year, a $17.5 million improvement. All business segments in the division reported revenue increases, including Cable ($25.3 million or 12.2%), Newspapers ($12.4 million or 6.2%), Broadcasting ($10.8 million or 12.6%) and Business Telecommunications ($6.8 million or 40.5%).
Videotron increased its revenues by $25.3 million (12.2%) and its operating income by $19.4 million (26.7%), primarily as a result of customer base growth, improved profitability of services, and reduced losses on equipment sales to customers. The revenues of Le SuperClub Videotron (the movie rental chain) rose by $2.3 million (21.1%), mainly because of the favourable impact of the acquisition of Jumbo Entertainment Inc., as well as higher royalties and retail sales.
The customer base for Videotron’s illico Digital TV service grew by 21,500 in the first quarter of 2005 to total 355,200. The combined customer base for all Videotron cable television services increased by 2,400 during the quarter and by 27,000 over the 12-month period ended March 31, 2005. The number of customers for cable Internet access service grew by 27,400 in the first quarter and by 97,100 clients over the 12-month period ended March 31, 2005, to total 530,000 as of March 31, 2005.
The new Voice over IP telephone service, officially launched on January 24, 2005, had 14,900 customers at the end of the first quarter of 2005, March 31st. Company officials said that number rose to 23,000 by the end of April.
Videotron’s net monthly ARPU (average revenue per user) increased by 7.5% to $48.84 in the first quarter of 2005, compared with $45.42 one year earlier. The segment’s operating margin for all operations, stated as a percentage, increased to 39.7%, compared with 35.2% in the same quarter of 2004. The segment generated $6.6 million in free cash flow from operations in the first quarter of 2005, compared with negative $5.1 million in the first quarter of 2004.
