Quebecor Q3 revenues tick upwards, driven by wireless

Quebecor Inc. posted its third-quarter earnings on Thursday morning, with revenues slightly up, boosted by a strong performance in the wireless and home internet sectors. The company’s total revenues hit $1.11 billion in the three-month period ending on Sept. 30, a 3.6 per cent increase ($38.3 million) from the same period in 2019. The boosted revenues were driven by wireless services, where revenues jumped seven per cent ($61.2 million). However, the ongoing pandemic led to a six per cent reduction in Quebecor’s media revenues, with reduced advertising and fewer sporting events dragging down profits. Profits dropped by about 21 per cent compared to the same time last year, from $178.5 million to $140.9 million. On Thursday’s earnings call, Quebecor president and CEO Pierre-Karl Péladeau said that between its Videotron division and flanker brand Fizz, the company was “again number one in the market”. “We are happy with the continued growth and ever improving profitability of our telecom segment where Videtron’s performance in broadband was particularly impressive this quarter,” said Péladeau. New internet subscribers were a key source of growth — Videotron substantially beat analyst expectations by adding 20,500 new connections, compared to 17,400 in Q3 2019. Total internet subscribers were 1.77 million at the end of the quarter. Meanwhile, TV was the weakest of the cable offerings, losing 15,500 subscribers over the quarter, more than the 13,200 subscribers lost in the same quarter last year. Videotron now counts 1.48 million total TV subscribers. Videotron and Fizz also showed solid wireless growth, with 47,700 new subscribers, a total increase of 12.7 per cent. This growth was slower than Q3 of 2019, where 56,800 new subscribers joined, but Vidéotron president and CEO Jean-François Pruneau explained that this was due to an extended period of promotional pricing for Fizz offered last year, which drove a particularly high number of subscribers. The company’s total wireless subscribers are now at 1.45 million. Wireless average billing per user appeared to weaken, dropping from $53.28 at the same point last year to $50.98. Pruneau said that this reduction was partly due to a reduced level of roaming fees with COVID-19-related restrictions to travel, but also due to the lower prices offered by flanker brand Fizz, and the company’s broader focus on BYOD (bring your own device) wireless plans. Responding to a question from RBC analyst Drew McReynolds, Pruneau said that this strategy of focusing on BYOD would likely start to pay off more in about 24 months, in contrast to Vidéotron’s competitors, which are pushing wireless equipment now and boosting their immediate revenue. “It’s pretty obvious that they really bought subscribers … it’s going to be tough on their profitability in the long run.” Although Quebecor’s media and sports and entertainment sectors both faced reduced revenues in the third quarter, TVA Group president and CEO France Lauziere said that COVID-19 meant this was expected. However, she pointed to certain bright spots — TVA Sport saw a 29 per cent increase in revenue, although this was mostly attributed to postponed NHL playoffs, which would typically occur in the second quarter. Meanwhile, TVA Group’s overall ratings ticked upwards, hitting 41.5 per cent market share, up 3.2 per cent from the same time last year, and helped by strong viewership on TVA’s news programming. — Reporting by Tim Forster at tforster@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Quebecor Q3 revenues tick upwards, driven by wireless

News | November 5, 2020

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Quebecor Q3 revenues tick upwards, driven by wireless

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