New president and CEO Natale “extremely excited” about company’s future
TORONTO – A surge in new wireless customers buoyed second quarter profits and revenues at Rogers Communications, the company announced Thursday.
For the period ended June 30, 2017, net income of $531 million jumped 35% from $394 million in the same period last year, while adjusted net income increased 20% from $427 million to $514 million year-over-year as a result of higher adjusted operating profit and lower depreciation and amortization, combined with a gain on disposition of certain real estate assets.
Revenue increased 4% this quarter to $3.59 billion from $3.45 billion year-over-year, largely driven by Wireless service revenue growth of 8%. Wireless service revenue increased primarily as a result of a larger subscriber base and the continued adoption of higher-value Share Everything plans. Cable revenue was flat this quarter, as continued strong Internet revenue growth of 7% offset declines in Television and Phone revenue, while Media revenue grew 4% due to the continued growth of sports-related revenue, increased sales at Today's Shopping Choice (TSC, previously branded as The Shopping Channel), and higher conventional broadcast TV advertising revenue, which was partially offset by lower publishing-related advertising and circulation revenue due to the strategic shift to digital media announced late last year.
Free cash flow of $626 million grew 26% from $495 million last year, primarily driven by lower net additions to property, plant and equipment and increased adjusted operating profit.
Rogers said that its Wireless service revenue growth of 8% was the highest growth rate since 2009, and that postpaid net additions for the quarter were 93,000, up 28,000 year-over-year on substantially lower churn of 1.05%. Postpaid churn declined 9 basis points and represented the lowest churn since 2009. Monthly average post-paid revenue increased to $124.31 from from $116.06 in the second quarter of 2016.
The company ended the quarter with 8.71 million wireless postpaid customers and 1.68 million prepaid customers. On the TV side, Rogers lost 25,000 cable customers to fall to 1.77 million; added 11,000 Internet customers to sit at 2.18 million broadband subs; and added 2,000 home phone customers and now has 1.09 million of those households.
Rogers added that it expects to launch Comcast's X1 all-IP video platform in 2018.
"I have been at Rogers for 13 weeks now and I am extremely excited about the prospects we have ahead of us”, said president and CEO Joe Natale, in a statement. “We have simplified our organizational structure for deeper end-to-end accountability for the customer experience and to drive further improvements in customer service and business performance. We are also intensifying our company-wide focus on cost efficiency to help generate further margin expansion. We will drive a deeper focus on delivering an outstanding customer experience while growing revenue and profitability to create more value for shareholders."
Rogers’ full second quarter financial results are available here.
