MONTREAL — Strong wireless growth helped to drive up BCE’s fourth quarter and annual 2014 results, with the company reporting today a 3.1% increase in operating revenues and a 2.6% increase in adjusted EBITDA for its full fiscal year. BCE’s 2014 operating revenues and adjusted EBITDA totalled $21.04 billion and $8.3 billion, respectively.
BCE’s Q4 2014 net earnings attributable to common shareholders totalled $542 million, or $0.64 per share, representing 9.5% growth from the $495 million net earnings it reported in Q4 2013. For the full 2014 year, BCE’s net earnings attributable to common shareholders were $2.36 billion, or $2.98 per share, which is a 19.6% increase over the $1.97 billion annual net earnings BCE reported in 2013.
BCE further announced its annual common share dividend will increase 5.3%, or 13 cents per share, to $2.60, effective with BCE’s Q1 2015 dividend payable on April 15.
“These strong Q4 and 2014 results prove Bell is a bold competitor focused on leading in the growth services of Canadian communications — wireless, TV, Internet and media,” said George Cope, President and CEO of BCE Inc. and Bell Canada, in a BCE news release. “Bell Wireless delivered exceptional customer additions and strong revenue growth, including a significant quarterly increase in average revenue per customer as smartphones and data services soar in popularity.
“With fast-growing Fibe TV and Internet leading the way, we recorded our first quarter of growth across each of wireline revenue, EBITDA and wireline residential customer net additions since the introduction of cable telephony a decade ago. Bell Media continued to set the pace in Canadian multimedia with ongoing leadership in conventional and specialty TV, radio and now, with CraveTV, the burgeoning on-demand video streaming marketplace,” Cope said.
Drilling down into the Q4 results from BCE’s various divisions, BCE said healthy growth at Bell (comprised of Bell Wireless, Bell Wireline and Bell Media) was offset by a year-over-year decline at Bell Aliant. For the full 2014 year, Bell operating revenues and adjusted EBITDA increased 3.5% and 3.7%, respectively, to $18.73 billion and almost $7.07 billion.
In Q4 2014, Bell’s operating revenues grew 2.6% to $4.9 billion, primarily attributable to a strong year-over-year 9.6% increase at Bell Wireless and positive overall Bell Wireline revenue growth of 1% in the fourth quarter, according to the BCE news release. However, Bell Media revenues declined 3.9% in Q4 2014, compared to the same quarter last year, while its adjusted EBITDA decreased 16.5%. Bell Media’s Q4 decrease was mostly the result of declining conventional TV advertising and higher TV content costs for sports broadcast rights and the launch of Crave TV, BCE said in its release.
Bell Wireless attributed its strong Q4 revenue increase to 26% growth in wireless data revenue, which now represents approximately half of its total service revenues. Bell Wireless product revenues were up 24.6% due to more activations and upgrades to more premium smartphones compared to last year.
Bell Wireless postpaid subscriber gross additions totalled 377,735 in Q4, a 2.6% increase over last year, as a result of strong holiday sales, higher activations in western Canada and increased tablet sales, BCE said. However, the company’s postpaid net additions were only 117,378, compared to 119,520 in Q4 2013, bringing the total number of postpaid customers at the end of 2014 to 6,986,196, an increase of 4.6% for the year.
The total number of Bell Wireless customers grew 2.5% in 2014 to 7,970,702, with postpaid customers representing 88% of this total, compared to 86% at the end of 2013. The percentage of postpaid subscribers with smartphones increased to 76% at the end of 2014, compared to 73% at the end of 2103. Postpaid customer churn in Q4 2014 remained essentially unchanged at 1.3%.
Furthermore, Bell Wireless saw higher blended ARPU, which increased 5.5% to $61.12 in Q4, driven by accelerating data usage on Bell’s expanding 4G LTE network, according to the company. For full-year 2014, Bell Wireless blended ARPU increased 4.9% to $60.07.
Bell Wireless said its 4G LTE network coverage increased to 86% of the Canadian population at the end of Q4 and is expected to grow to more than 98% coverage by the end of 2015, as Bell intends to roll out LTE to more small towns, rural locations and Canada’s North.
BCE’s Bell Wireline business reported its operating revenues increased 1% to almost $2.63 billion in Q4 2014, representing its first quarter of positive growth since Q2 of 2010. Bell Wireline adjusted EBITDA grew 2% to $953 million in Q4, driving a 40 basis point improvement in margin to 36.3%. However, for the full year of 2014, Bell Wireline operating revenues decreased 0.6% to $10.04 billion, while operating costs declined 0.5% to $6.27 billion, resulting in a 0.7% decrease in Bell Wireline adjusted EBITDA to a little less than $3.77 billion.
Bell Wireline residential customer activations saw a turnaround in the fourth quarter, with residential net activations increasing by 23,917 to 11,451 in Q4 2014 from a net loss of 12,466 last year. Net high-speed Bell Internet customer additions were 34,126 in Q4 2014, more than double the 15,690 customers added in Q4 2013. Bell Fibe TV added 58,371 net new customers in Q4 2014, compared to 60,301 in the same quarter last year.
Total BCE IPTV net additions in Q4 2014 were 76,074, up from 75,120 in Q4 2013. At the end of 2014, BCE served 933,547 IPTV subscribers, up 42% from the end of 2013.
The Bell Fibe TV footprint reached more than 5 million households at the end of 2014, compared to about 4.3 million at the end of 2013. Including Bell Aliant’s FibreOP service area, BCE’s total IPTV footprint now covers 6 million homes.
Bell had 2,287,489 high-speed Internet customers at the end of 2014, a 4.7% increase over 2013. Including Bell Aliant, BCE has 3,297,026 high-speed Internet subscribers.
However, Bell satellite TV net customer losses increased to 33,934 in Q4 2014 from 24,112 last year. In total, Bell TV’s subscriber base (Bell Satellite TV and Fibe TV) was 2,376,885 at the end of 2014, a 4.3% increase over 2013. Including Bell Aliant, BCE now serves 2,642,608 TV customers, an increase of 6.2% over 2013.
As noted above, Bell Media operating revenues decreased by 3.9% in Q4 2014 to $789 million. Bell Media’s adjusted EBITDA decreased 16.5% in Q4 2014 to $192 million. However, for the full-year 2014, Bell Media’s operating revenues and adjusted EBITDA were up 14.9% and 7.5%, respectively, to almost $2.94 billion and $734 million, reflecting the incremental contribution to advertising and subscriber revenues in the first half of the year from Bell’s acquisition of Astral Media.
Bell Media’s radio services reached 17.4 million listeners who spent 84 million hours tuned in each week during Q4 2014.
Bell Aliant’s Q4 results showed a 1.7% increase in its operating revenues to $700 million, as growth in Internet, TV, other data and wireless revenues exceeded the declines in local, long distance and other revenues. Despite higher year-over-year operating revenues, Bell Aliant’s adjusted EBITDA decreased 4.3% in Q4 2014 to $292 million, reflecting higher operating costs driven by growth of its FibreOP services.
With the privatization of Bell Aliant completed on November 1, 2014, Bell Aliant will no longer be a reporting operating segment, starting with BCE’s Q1 2015 results. At that time, Bell Aliant’s operating results will be integrated with Bell’s respective Wireline and Wireless segments.
