Canada NewsWire
MONTRÉAL, May 11, 2017
MONTRÉAL, May 11, 2017 /CNW Telbec/ - Quebecor Inc. ("Quebecor" or the "Corporation") today reported its consolidated financial results for the first quarter of 2017 and announced a 22.2% increase in its quarterly dividend. Quebecor consolidates the financial results of its Quebecor Media Inc. ("Quebecor Media") subsidiary, in which it holds an 81.1% interest.
HIGHLIGHTS
First quarter 2017
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1 | See "Adjusted operating income" under "Definitions." | |
2 | See "Adjusted income from continuing operations" under "Definitions." | |
3 | See "Key performance indicator" | |
4 | The sum of subscriptions to the cable television, cable Internet access and Club illico services, plus subscriber connections to the cable and mobile telephony services. |
"Videotron, which is now positioned as one of the leading mobile carriers in Québec, posted another excellent performance" noted Pierre Karl Péladeau, President and Chief Executive Officer of Quebecor. "The steady uptrend in Videotron's numbers has been driven by its high-growth products and services, led by mobile telephony, Internet access, business solutions and Club illico."
"During the 12-month period ended March 31, 2017, our mobile telephony service added 125,200 subscriber connections, a 15.7% increase," commented Manon Brouillette, President and Chief Executive Officer of Videotron. "Those gains were realized while we exhibited a significant growth of our mobile service's ARPU to $52.64 in the first quarter of 2017, up 6.0% year over year. Videotron's cable Internet access service increased its subscriber base by 50,000 or 3.2% in the 12-month period ended March 31, 2017, the largest 12‑month growth since 2013. Videotron Business Solutions also continued to grow, demonstrating the soundness of our strategic decision to invest in our data centres and Fibrenoire inc. We can now assemble and offer a full line of products and services for the benefit of our business customers in Québec.
"Lastly, Videotron was ranked the most respected telecommunications company in Québec for the 12th consecutive year. Being part of the daily lives of millions of households and businesses across Québec that place their trust in us, we have built a strong relationship with our customers. We are gratified by our top ranking, which we owe to our 6,500 dedicated employees."
"In the Media segment, the broadcasting business increased its revenues by $4.8 million or 4.5% and improved its adjusted operating income by $4.6 million," observed Julie Tremblay, President and Chief Executive Officer of Media Group. "The positive results reflect the impact of higher subscription revenues at TVA Sports, higher advertising revenues at TVA Network and TVA Sports, and cost reductions yielded by restructuring initiatives. It is the second consecutive quarter of year-over-year increases in advertising revenues for TVA Network, indicating the positive impact of our programming strategy, the value of our content and the effectiveness of our multiplatform offerings. However, the Media segment's overall results were impacted by decreased revenues and adjusted operating income from film production and audiovisual services, which had unusually high volume in the first quarter of 2016. Meanwhile, cost‑cutting initiatives in the magazine publishing business paid off and mitigated the negative impact of the revenue decrease. We are continuing our efforts to reduce operating expenses and are working on a plan to promote our strongest mastheads in order to improve the profitability of the magazine business.
"On the business development front, Quebecor's Media Group formed a partnership with Tuango Inc. ("Tuango"), Québec's largest online promotional network. Under the agreement, Quebecor's Media Group will be able to sell advertising space in its media properties in exchange for goods and services, from which it will be able to derive revenues by reselling them on Tuango," Ms. Tremblay added.
In the Sports and Entertainment segment, Event Management Gestev inc. ("Gestev") announced the acquisition of Wasabi atelier expérientiel on April 4, 2017. The transaction expands Gestev's experiential marketing and sponsorship activation capabilities and extends its reach in the Montréal market.
Quebecor Media and Videotron have carried out a number of financial transactions since the end of 2016. "The redemption of Senior Notes and issuance of Notes at more advantageous interest rates will generate approximately $15.0 million in annual savings in interest on the debt," said Jean-François Pruneau, Senior Vice President and Chief Financial Officer of Quebecor. "In the first quarter, Quebecor's net income was affected by an unfavourable variance related to convertible debentures, caused by the 9.9% increase in the price of Quebecor shares in the first three months of 2017."
The Board of Directors of Quebecor reviewed its dividend payment policy again. In view of the Corporation's financial profile, including its capacity to generate cash flows and its strong balance sheet, the Board approved a 22.2% increase in the quarterly dividend on Class A and Class B shares from $0.045 to $0.055. Since the first quarter of 2015, the quarterly dividend has been hiked three times, adding up to a cumulative 120.0% increase for the Corporation's shareholders. "We remain very upbeat about the Corporation's cash flow growth prospects," said Jean‑François Pruneau.
"The Corporation is reaping the benefits of its investments of recent years in activities with high growth and profitability potential and remains in an excellent position to create shareholder value," concluded Pierre Karl Péladeau.
Table 1 | |||||||||||
Quebecor first quarter financial highlights, 2013 to 2017 | |||||||||||
(in millions of Canadian dollars, except per share data) | |||||||||||
| | | 2017 | | 2016 | | 2015 | | 2014 | | 2013 |
| | | | | | | | | | | |
Revenues | $ | 996.4 | $ | 975.4 | $ | 929.0 | $ | 876.1 | $ | 855.0 | |
Adjusted operating income | | 365.1 | | 354.7 | | 339.2 | | 335.0 | | 312.6 | |
(Loss) income from continuing operating activities attributable to shareholders | | (0.2) | | 69.9 | | 31.5 | | 38.6 | | (3.9) | |
Net (loss) income attributable to shareholders | | (0.2) | | 69.9 | | 29.4 | | 39.1 | | (6.5) | |
Adjusted income from continuing operating activities | | 70.9 | | 67.7 | | 41.4 | | 45.1 | | 33.0 | |
Per basic share: | | | | | | | | | | | |
| (Loss) income from continuing operating activities attributable to shareholders | | - | | 0.57 | | 0.26 | | 0.32 | | (0.03) |
| Net (loss) income attributable to shareholders | | - | | 0.57 | | 0.24 | | 0.32 | | (0.05) |
| Adjusted income from continuing operating activities | | 0.58 | | 0.55 | | 0.34 | | 0.37 | | 0.27 |
2017/2016 first quarter comparison
Revenues: $996.4 million, a $21.0 million (2.2%) increase.
Adjusted operating income: $365.1 million, a $10.4 million (2.9%) increase.
Net loss attributable to shareholders: $0.2 million in the first quarter of 2017, compared with net income attributable to shareholders in the amount of $69.9 million ($0.57 per basic share) in the same period of 2016, an unfavourable variance of $70.1 million ($0.57 per basic share).
Adjusted income from continuing operating activities: $70.9 million ($0.58 per basic share) in the first quarter of 2017, compared with $67.7 million ($0.55 per basic share) in the same period of 2016, an increase of $3.2 million ($0.03 per basic share).
Financial transactions
Dividend
On May 10, 2017, the Board of Directors of Quebecor declared a quarterly dividend of $0.055 per share on its Class A Shares and Class B Shares, payable on June 20, 2017 to shareholders of record at the close of business on May 26, 2017. This dividend is designated an eligible dividend, as provided under subsection 89(14) of the Canadian Income Tax Act and its provincial counterpart.
Normal course issuer bid
On August 3, 2016, the Board of Directors of Quebecor authorized the renewal of its normal course issuer bid for a maximum of 500,000 Class A Shares, representing approximately 1.3% of issued and outstanding Class A Shares, and for a maximum of 2,000,000 Class B Shares, representing approximately 2.4% of issued and outstanding Class B Shares as of August 3, 2016. The purchases can be made from August 15, 2016 to August 14, 2017 at prevailing market prices on the open market through the facilities of the Toronto Stock Exchange or other alternative trading systems. All shares purchased under the bid will be cancelled.
In the first quarter of 2017, the Corporation purchased and cancelled 329,600 Class B Shares for a total cash consideration of $12.8 million (39,600 Class B Shares for a total cash consideration of $1.3 million in the first quarter of 2016). The $11.6 million excess of the purchase price over the carrying value of the repurchased Class B Shares was recorded as a reduction in retained earnings ($1.2 million in the first quarter of 2016).
Detailed financial information
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