Quebecor Inc. Reports Consolidated Results for Third Quarter 2013
(firmenpresse) - MONTREAL, QUEBEC -- (Marketwired) -- 11/07/13 -- Quebecor Inc. ("Quebecor" or the "Corporation") (TSX: QBR.A)(TSX: QBR.B) today reported its consolidated financial results for the third quarter of 2013. Quebecor consolidates the financial results of its Quebecor Media Inc. ("Quebecor Media") subsidiary, in which it holds a 75.4% interest.
Third quarter 2013 highlights
"The News Media and Broadcasting segments grew their operating income in the third quarter of 2013," said Robert Depatie, President and Chief Executive Officer of Quebecor. "Accordingly, the Telecommunications segment's growth was fully reflected in the overall improvement in the Corporation's consolidated results. The stronger results at our media subsidiaries show that the restructuring and repositioning initiatives we have taken over the past few years are bearing fruit. Financial transactions that create value for shareholders, carried out since the beginning of 2012, also contributed to the 28.7% increase in adjusted income from continuing operations."
"In a highly competitive market, Videotron posted strong results again in the third quarter of 2013, growing its revenues by 5.1% and its operating income by 8.2%," said Manon Brouillette, President and Chief Operating Officer of Videotron. "All of Videotron's core services generated revenue increases, particularly mobile telephony and Internet access. Average monthly revenue per user ("ARPU") continued to grow, climbing $6.92 (6.2%) to $119.24. These results demonstrate once again Videotron's great creativity in developing new services and delivering the best possible customer experience. During the quarter, the illico Club Unlimited service launched in early 2013 passed the 50,000-customer mark. illico Club Unlimited offers the largest selection of unlimited on-demand French-language titles in Canada.
"During the third quarter, Videotron announced the expansion of its multiplatform offering with the addition of Super Channel to its illico Digital TV service. Super Channel carries blockbuster films, popular television series and boxing matches. Videotron also announced plans to launch a new English-language community television channel, MYtv, to serve as a voice and mirror for the Anglophone community in the greater Montreal area."
"The numbers show that the refocusing of our news media operations generated concrete financial results in the third quarter of 2013," commented Julie Tremblay, President and Chief Executive Officer of Sun Media Corporation. "The News Media segment's operating income increased by 14.7%, reflecting the impact of the many significant cost-containment and repositioning measures implemented in recent years. On the business development front, Le Sac Plus reached an exclusive agreement to distribute the Target retail chain's weekly flyer in the Le Sac Plus doorknob bag starting in fall 2013, in partnership with the Novus agency. Le Sac Plus will distribute nearly 100 million promotional flyers per year for Target through its vast, Quebec-wide network."
In the Broadcasting segment, operating income totalled $15.2 million, an $8.4 million increase from the same period of 2012. The increase reflects the positive impact of a retroactive adjustment to retransmission royalties as well as the restructuring and cost-containment initiatives undertaken in the second quarter of 2013.
"By leveraging all its strengths, Quebecor is positioning itself to pursue its growth, business development and profitability targets," said Robert Depatie.
2013/2012 third quarter comparison
Revenues: $1.08 billion, an increase of $20.4 million (1.9%).
Operating income: $380.3 million, an increase of $31.0 million (8.9%).
Net loss attributable to shareholders: $167.8 million ($1.36 per basic share) in the third quarter of 2013, compared with net income attributable to shareholders in the amount of $17.1 million ($0.14 per basic share) in the same period of 2012, an unfavourable variance of $184.9 million ($1.50 per basic share).
During the third quarter of 2013, Quebecor Media recorded a total non-cash charge of $305.8 million in its News Media and Leisure and Entertainment segments for impairment of goodwill and intangible assets ($187.0 million in the third quarter of 2012), in accordance with IFRS accounting valuation principles. The charge reflects weak market conditions and the impact of the transition to digital in the newspaper, music and book industries.
Adjusted income from continuing operations: $63.7 million in the third quarter of 2013 ($0.51 per basic share) compared with $49.5 million ($0.39 per basic share) in the third quarter of 2012, an increase of $14.2 million ($0.12 per basic share).
2013/2012 year-to-date comparison
Revenues: $3.21 billion, an increase of $19.5 million (0.6%).
Operating income: $1.07 billion, an increase of $44.5 million (4.4%).
Net loss attributable to shareholders: $177.3 million ($1.43 per basic share) in the first nine months of 2013, compared with net income attributable to shareholders in the amount of $154.0 million ($1.22 per basic share) in the same period of 2012, an unfavourable variance of $331.3 million ($2.65 per basic share).
Adjusted income from continuing operations: $148.2 million in the first nine months of 2013 ($1.19 per basic share), compared with $131.8 million ($1.04 per basic share) in the same period of 2012, an increase of $16.4 million ($0.15 per basic share).
Financing activities
The following financial transactions have been concluded since the end of the second quarter of 2013.
Dividends
On November 6, 2013, the Board of Directors of Quebecor declared a quarterly dividend of $0.025 per share on Class A shares and Class B shares, payable on December 17, 2013 to shareholders of record at the close of business on November 22, 2013. This dividend is designated to be 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 8, 2013, the Corporation filed a normal course issuer bid for a maximum of 1,956,068 Class A shares, representing approximately 5% of issued and outstanding Class A shares, and for a maximum of 8,429,248 Class B shares, representing approximately 10% of the public float of Class B shares as of July 31, 2013. The purchases can be made from August 13, 2013 to August 12, 2014 at prevailing market prices on the open market through the facilities of the Toronto Stock Exchange. All shares purchased under the bid will be cancelled.
In the first nine months of 2013, the Corporation purchased and cancelled 1,423,700 Class B shares for a total cash consideration of $31.5 million (1,457,000 Class B shares for a total cash consideration of $25.8 million in the first nine months of 2012). The excess of $26.1 million in the purchase price over the carrying value of Class B shares repurchased was recorded as a reduction in retained earnings in the first nine months of 2013 ($20.3 million in the first nine months of 2012).
Detailed financial information
For a detailed analysis of Quebecor's third quarter 2013 results, please refer to the Management Discussion and Analysis and consolidated financial statements of Quebecor, available on the Corporation's website at or from the SEDAR filing service at .
Conference call for investors and Webcast
Quebecor will hold a conference call to discuss its third quarter 2013 results on November 7, 2013, at 11:00 a.m. EST. There will be a question period reserved for financial analysts. To access the conference call, please dial 1 877 293-8052, access code for participants 95603#. A tape recording of the call will be available from November 7, 2013 to February 7, 2014 by dialling 1 877 293-8133, conference number 1054700, access code for participants 95603#. The conference call will also be webcast live on Quebecor's web site at . It is advisable to ensure the appropriate software is installed before accessing the call. Instructions and links to free player downloads are available at the Internet address shown above.
Cautionary Statement Regarding Forward-Looking Statements
The statements in this press release that are not historical facts are forward-looking statements and are subject to significant known and unknown risks, uncertainties and assumptions that could cause the Corporation's actual results for future periods to differ materially from those set forth in the forward-looking statements. Forward-looking statements may be identified by the use of the conditional or by forward-looking terminology such as the terms "plans," "expects," "may," "anticipates," "intends," "estimates," "projects," "seeks," "believes," or similar terms, variations of such terms or the negative of such terms. Certain factors that may cause actual results to differ from current expectations include seasonality (including seasonal fluctuations in customer orders), operating risk (including fluctuations in demand for Quebecor's products and pricing actions by competitors), insurance risk, risks associated with capital investment (including risks related to technological development and equipment availability and breakdown), environmental risks, risks associated with labour agreements, risks associated with commodities and energy prices (including fluctuations in the cost and availability of raw materials), credit risk, financial risks, debt risks, risks related to interest rate fluctuations, foreign exchange risks, risks associated with government acts and regulations, risks related to changes in tax legislation, and changes in the general political and economic environment. Investors and others are cautioned that the foregoing list of factors that may affect future results is not exhaustive and that undue reliance should not be placed on any forward-looking statements. For more information on the risks, uncertainties and assumptions that could cause Quebecor's actual results to differ from current expectations, please refer to Quebecor's public filings available at and including, in particular, the "Risks and Uncertainties" section of Quebecor's Management Discussion and Analysis for the year ended December 31, 2012.
The forward-looking statements in this press release reflect Quebecor's expectations as of November 7, 2013 and are subject to change after that date. Quebecor expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
The Corporation
Quebecor, a Canadian telecommunications, entertainment and news media leader, is one of the best-performing integrated communications companies in the industry. Driven by their determination to deliver the best possible customer experience, all of Quebecor's subsidiaries and brands are differentiated by their high-quality, multiplatform, convergent products and services.
Quebecor (TSX: QBR.A)(TSX: QBR.B) is headquartered in Quebec. It holds a 75.36% interest in Quebecor Media, which employs nearly 16,000 people in Canada.
A family business founded in 1950, Quebecor is strongly committed to the community. Every year, it actively supports more than 400 organizations working in the vital fields of culture, health, education, the environment, and entrepreneurship.
Visit our Web site:
Follow us on Twitter: twitter.com/QuebecorMedia
Operating income
In its analysis of operating results, the Corporation defines operating income, as reconciled to net (loss) income under IFRS, as net (loss) income before amortization, financial expenses, (loss) gain on valuation and translation of financial instruments, charge for restructuring of operations, impairment of assets and other special items, charge for impairment of goodwill and intangible assets, (loss) gain on debt refinancing, income tax, and (loss) income from discontinued operations. Operating income as defined above is not a measure of results that is consistent with IFRS. It is not intended to be regarded as an alternative to other financial operating performance measures or to the statement of cash flows as a measure of liquidity. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Corporation uses operating income in order to assess the performance of its investment in Quebecor Media. The Corporation's management and Board of Directors use this measure in evaluating its consolidated results as well as the results of the Corporation's operating segments. This measure eliminates the significant level of impairment and amortization of tangible and intangible assets and is unaffected by the capital structure or investment activities of the Corporation and its segments.
Operating income is also relevant because it is a significant component of the Corporation's annual incentive compensation programs. A limitation of this measure, however, is that it does not reflect the periodic costs of tangible and intangible assets used in generating revenues in the Corporation's segments. The Corporation also uses other measures that do reflect such costs, such as cash flows from segment operations and free cash flows from continuing operating activities of the Quebecor Media subsidiary. In addition, measures like operating income are commonly used by the investment community to analyze and compare the performance of companies in the industries in which the Corporation is engaged. The Corporation's definition of operating income may not be the same as similarly titled measures reported by other companies.
Table 2 below provides a reconciliation of operating income with net (loss) income as disclosed in Quebecor's condensed consolidated financial statements.
Adjusted income from continuing operations
The Corporation defines adjusted income from continuing operations, as reconciled to net (loss) income attributable to shareholders under IFRS, as net (loss) income attributable to shareholders before (loss) gain on valuation and translation of financial instruments, charge for restructuring of operations, impairment of assets and other special items, charge for impairment of goodwill and intangible assets, (loss) gain on debt refinancing, net of income tax related to adjustments, net (loss) income attributable to non-controlling interests related to adjustments, and (loss) income from discontinued operations attributable to shareholders. Adjusted income from continuing operations, as defined above, is not a measure of results that is consistent with IFRS. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Corporation's definition of adjusted income from continuing operations may not be identical to similarly titled measures reported by other companies.
Table 3 provides a reconciliation of adjusted income from continuing operations to net (loss) income attributable to shareholders in Quebecor's condensed consolidated financial statements.
Average Monthly Revenue per User
ARPU is an industry metric that the Corporation uses to measure its monthly cable television, Internet access, cable and mobile telephony revenues per average basic cable customer. ARPU is not a measurement that is consistent with IFRS and the Corporation's definition and calculation of ARPU may not be the same as identically titled measurements reported by other companies. The Corporation calculates ARPU by dividing its combined cable television, Internet access, and cable and mobile telephony revenues by the average number of basic customers during the applicable period, and then dividing the resulting amount by the number of months in the applicable period.
Contacts:
Jean-Francois Pruneau
Senior Vice President and Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
514 380-4144
Martin Tremblay
Vice President, Public Affairs
Quebecor Media Inc.
514 380-1985
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