MONTREAL – Quebecor Inc. reported a third-quarter profit on Tuesday, thanks largely to the company’s media business.
The company said it earned net income of $33.8 million, or 53 cents a share, in the quarter, compared with $22.6 million or 35 cents a share in the same period of 2005.
At the same time, the company reported that its subsidiaries, Quebecor Media and Quebecor World, are performing in very different ways.
Quebecor World, the big commercial printer, reported a third quarter drop in revenues and net income, and said it has suspended its dividend on subordinate and multiple voting shares.
Wes Lucas, Quebecor World’s President and CEO, said the performance is “not acceptable and does not meet the high expectations for our shareholders’ investment”.
However, he said a five-point transformation plan has been implemented and should deliver short-term benefits in 2007 and 2008, and create long-term earnings and free cash flow growth.
Over at Quebecor Media, with its interests in cable TV, wireless telephone service, broadcasting, and entertainment, third quarter net income rose by $56.7 million, driven by a 30.4% surge in Videotron’s operating income “and the favourable variances generated by debt refinancing”, said Pierre Karl Peladeau, Quebecor Inc’s President and CEO.
“Videotron continued to post excellent customer growth figures for its digital cable television, Internet access, and telephone services. It also added a new product, wireless telephone service in August 2006,” he said.
On the cable side, revenues in the third quarter rose by 22.6% compared to the same period in 2005, mainly due to customer growth, the company said.
In the third quarter, Videotron counted 60,900 more customers for cable telephone service, 43,900 for cable Internet access, and 39,900 for Illico Digital TV. As of September 30, Videotron had a total customer base of 1,553,000 subscribers in its service area across Quebec, with 585,000 subscribers to its illico Digital TV service, 769,000 subscribers to its Internet access services, and 344,000 subscribers to its residential cable telephone service.
Videotron’s monthly ARPU (average revenue per user) increased by $9.87 to $62.42 in the third quarter, compared with $52.55 in the same 2005 period.
The company did not provide any figures on customers for its new wireless telephone service, which was launched during the third quarter. The company said it plans to complete the roll-out of the new service across Quebec by the end of 2006.
The Broadcasting segment reported a slight dip (-2.5%) in third quarter revenues. Specialty TV channels brought in higher subscription revenues, but the TVA network reported lower advertising revenues.
The Internet portal, Canoe.ca, reported a year-to-year revenue increase of 31.5%, to $46.8 million.
