GuruFocus -
- Revenue: $1.4 billion, down 1% year-over-year.
- EBITDA: $625 million, up 3% from the previous year.
- Adjusted Cash Flows from Operations: $450 million, down 1% year-over-year.
- Telecom Segment Revenue: Decreased by $14 million, or 1%.
- Wireless Revenue: Increased by 3% to $558 million.
- Wireless EBITDA: $254 million, a 1% increase.
- Media Segment Revenue: $184 million, a 2% increase.
- Media Segment EBITDA: $19 million improvement compared to the previous year.
- Sports and Entertainment Segment Revenue: Decreased by 7% to $45 million.
- Net Income Attributable to Shareholders: $208 million, or $0.90 per share, compared to $174 million, or $0.75 per share, last year.
- Adjusted Income from Operating Activities: $205 million, or $0.89 per share, compared to $182 million, or $0.79 per share, last year.
- First Six Months Revenue: Up 9% to $2.7 billion.
- First Six Months EBITDA: Up 13% to $1.18 billion.
- Net Debt to EBITDA Ratio: 3.39 times.
- Available Liquidity: More than $2.1 billion at the end of the quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Quebecor Inc (TSX:QBRa) (QBCAF) reported a $625 million consolidated EBITDA, a $20 million increase compared to the same quarter last year.
- The company gained over 300,000 new wireless RGUs since acquiring Freedom Mobile, with a record quarterly net addition of 93,000 new RGUs.
- Quebecor Inc (QBCAF) successfully launched new affordable Freedom home Internet and TV services, expanding its multiservice offerings across Canada.
- The company maintained a stable consolidated cash flow from operations at $450 million despite competitive pressures.
- Quebecor Inc (QBCAF) fulfilled all nine undertakings made to Innovation, Science and Economic Development Canada, significantly lowering wireless bills for Canadians.
- Consolidated wireless ARPU decreased by $2.45 to $35.32, primarily due to the dilutive impact of Freedom prepaid services and Fizz introductory pricing.
- The company faced aggressive pricing retaliation from incumbents in Quebec, impacting its wireless pricing strategy.
- Quebecor Inc (QBCAF) experienced a decline in advertising revenues in its media segment, with television activities remaining negative excluding one-time adjustments.
- Bell's obstruction in finalizing MVNO contractual agreements is causing delays and forcing Quebecor Inc (QBCAF) to pay outdated rates.
- Total revenues decreased by 1% to $1.4 billion, and adjusted cash flows from operations were down by 1% compared to the same period last year.
A: We are pleased with the growth in RGUs and expect further success as our footprint expands. Our marketing efforts and service offerings are increasing, which should support continued growth. Regarding ARPU, while it has decreased, we are focused on maintaining a balance between volume growth and pricing.
Q: You've been aggressive on pricing to gain market share. Are there plans to add value to your services to potentially increase prices? Also, how is the ARPU decline affecting broadband services?
A: We aim to offer value-added services without commoditizing them. Our Fizz brand, for example, offers a fully digital experience, which is unique. Regarding broadband, there is no price freeze, and the ARPU decline is mainly due to not implementing annual increases this year. We remain confident in our cash flow targets.
Q: Can you discuss the stability of churn in your wireless business, especially compared to competitors?
A: Our churn has remained stable, unlike some competitors who have seen increases due to aggressive pricing strategies. Our pricing strategy has been effective, and we continue to focus on maintaining a stable ARPU.
Q: How do you view the back-to-school promotional season, and how important are North American roaming packages to your customers?
A: Back-to-school is a significant opportunity, and our plans are resonating well. Our roaming packages are a key differentiator, and we expect to see profitable growth during this period.
Q: With the launch of Fizz in the Freedom footprint, is there potential for repricing Freedom services?
A: Fizz is priced slightly below Freedom, but there is minimal risk of repricing Freedom. The two brands target different demographics, and we do not anticipate significant repricing pressure.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.