MONTREAL — The strong performance of Quebecor’s Videotron telecom segment helped to offset losses in its Quebecor Media subsidiary, allowing the parent company to maintain modest growth overall in the second quarter of 2016, Quebecor announced Thursday.
Quebecor’s revenues rose $28.7 million to reach $992.5 million in Q2 2016, which is a 3% increase over its Q2 2015 revenues of $963.8 million. The company’s adjusted operating income also rose 3.1% to $360.3 million in the second quarter of 2016, when compared to the same quarter last year.
The company’s telecom segment experienced 5.2% growth in revenues, increasing by $38.9 million to reach $780.4 million in revenues in Q2 2016. In addition, the adjusted operating income for Quebecor’s telecom business rose by $20.3 million or 5.9% in the second quarter of 2016, when compared to Q2 2015.
Drilling down into Videotron’s second quarter results, the subsidiary significantly increased its revenues from mobile telephony (up $26.5 million or 27.5% from Q2 2015), Internet access (up $16.5 million or 7.3%), business solutions (up $10.3 million or 62%) and the Club illico over-the-top video service (up $2 million or 37%). Furthermore, Videotron reported its average monthly revenue per user (ARPU) increased by $9.30 (or 7%) to reach $143.01 in the second quarter of 2016, compared to its Q2 2015 ARPU of $133.71.
“Quebecor grew its revenues by $28.7 million (3.0%) and its adjusted operating income by $11.0 million (3.1%) in the second quarter of 2016, reflecting a solid performance by the Telecommunications segment,” Pierre Dion, president and CEO of Quebecor, said in a news release announcing the company’s Q2 2016 results. “Customers continue to respond positively to the depth and quality of Videotron’s offerings, as is evident from the increase of 33,200 subscriber connections (4.2%) to its mobile telephony service in the second quarter of 2016.”
Manon Brouillette, president and CEO of Videotron, credited Videotron’s flagship products with helping to drive up the parent company’s revenues.
“The number of revenue generating units increased by 128,300 (2.3%) during the 12-month period ended June 30, 2016, including an increase of 126,000 subscriber connections (17.9%) to the mobile telephony service. The mobile service’s ARPU was $50.51 in the second quarter of 2016, up 7.4% from the same quarter of 2015. Our business solutions segment also continued to make a substantial contribution to our results in the second quarter of 2016, mainly due to the acquisition of Fibrenoire inc. and the business impacts from our major investments in our data centres,” Brouillette said in the news release.
Last month Videotron launched its new Giga Fibre Hybrid Internet access service, which provides residential and business customers with download speeds of up to 940 Mbps. “With Giga Fibre Hybrid service, Videotron maintains its pioneering posture,” Brouillette said. “More than 20 years ago, we were among the first to offer high-speed Internet in Quebec and we have since been able to differentiate ourselves by rapidly upgrading our services to meet our customers’ present and future needs.”
In comparison, the Quebecor Media segment did not fare as well in the second quarter of 2016. Media revenues decreased by $22.4 million or 8.9%, dropping to $229.2 million in Q2 2016 from revenues of $251.6 million in Q2 2015. Adjusted operating income also decreased in the Media segment, falling by $4.2 million or 37.8%, to hit $6.9 million in Q2 2016 as compared to $11.1 million in the second quarter of 2015.
As reported earlier this week, Quebecor’s TVA Group subsidiary experienced a net loss in the second quarter of 2016, primarily because of lost advertising revenue due to no Canadian NHL teams making the playoffs this year, combined with less revenue generated from soundstage and production equipment rentals compared to the same quarter last year.
“In the Media segment, the advertising revenues and operating income of our TVA Sports specialty channel were unfortunately affected by the Montreal Canadiens’ failure to qualify for the National Hockey League playoffs, which was not the case in the second quarter of 2015,” Julie Tremblay, president and CEO of Quebecor Media, said in the news release. “Meanwhile, the soundstage and equipment leasing operations of Mels Studios and Post-production G.P. (MELS) suffered from the absence of any major Hollywood production in the second quarter of 2016, whereas the movie X-Men Apocalypse was filming on MELS’ soundstages in the same period of 2015. However, we are pleased with the bookings we have in the coming months. The growth in the magazine publishing segment’s operating income resulted from a concerted effort to successfully integrate the magazines acquired from Transcontinental on April 12, 2015.”
Overall, the Quebecor parent company reported lower net income attributable to shareholders for the second quarter of 2016 — $9.8 million or $0.08 per basic share — compared to $72.1 million or $0.59 per basic share in the same quarter of 2015, a decrease of $62.3 million ($0.51 per basic share), including the $105.3 million unfavourable impact of losses and gains on embedded derivatives related to convertible debentures, the company said.
However, Quebecor’s adjusted income from continuing operating activities actually increased to $69.9 million ($0.57 per basic share) in the second quarter of 2016, compared with $66.5 million ($0.54 per basic share) in the same period of 2015, an increase of $3.4 million or $0.03 per basic share.
To access Quebecor’s full financial statement regarding its Q2 2016 results, click here.
