MONTREAL – Despite strong gains at its cable and telecom subsidiary Videotron, Quebecor Inc. saw its third quarter profits plummet by 35%.
The Montreal-based media giant said Wednesday that net income attributable to shareholders for the quarter ended September 30 was $26.1 million, well down from $83.0 million in the third quarter of 2010. Revenues for the period were $1.01 billion, a 4.6% year-over-increase increase from $969.9 million.
Videotron added 168,700 revenue-generating units (RGUs) this quarter, a 79.9% increase in growth recorded in the same quarter of 2010. RGUs are defined as the sum of cable television, Internet access and cable telephone service subscriptions, plus subscriber connections to its mobile telephone service.
After adding 47,500 new mobile subscribers this quarter, Videotron reported a total of 253,900 subscriber connections, including 181,200 new connections and 72,700 migrations from its mobile virtual network operator service.
Videotron also reported a net increase of 43,500 cable television customers, including a 77,700-subscriber increase for its illico digital service; 39,900 new Internet customers; and 37,800 more customers for its cable telephone service.
President and CEO Pierre Karl Peladeau described the results as “an exceptional quarter for all of our Telecommunications segment's services from every point of view”.
"Quebecor grew its revenues in the third quarter of 2011, mainly on the strength of the excellent performance of its Telecommunications segment," he said in a statement. "Thanks in particular to effective strategies to market bundled services, including mobile telephone service, at a time when over-the-air analog television broadcasting was ending, Videotron posted the strongest quarterly growth in its total customer base since its acquisition by Quebecor Media in October 2000.”
Peladeau explained the drop in Quebecor's profits was caused mainly by re-measurement of financial instruments, investments in new products and services, higher subscriber acquisition costs for Videotron’s wireless network, plus an increase in the amortization charge for the network’s equipment and licences.
"In short, it was an excellent quarter for Quebecor in terms of customer growth, product development and business opportunities, strengthening the foundations for the Corporation's future growth", he added.
