PHOTO: Canadian Press
Telecommunications company Rogers Communications signage is pictured on Ottapora.
UPDATE 8: 32 am.
Rogers Communications Inc. it says it found $ 48 million in cost savings in its most recent quarter after closing its deal to buy Shaborn Communications Inc. that represents nearly 25 percent of the $ 200 million in costs it plans to cut this year as it works to eliminate duplication.
To continue its savings, the Toronto-based telecommunications company plans to sell up to $ 1 billion in non-core assets over the next six to 12 months, mostly made up of excess real estate, it said on Wednesday as it reported its second-quarter profit results.
“We have some additional business operations, which I’m not prepared to announce, that we’re looking at whether or not there’s an opportunity there,” Rogers Chief Financial Officer Glenn Brandt said on an analyst call.
He said the company’s media branch and sports franchises would not be affected by the sale of assets that would focus on more peripheral Holdings.
“These are really assets that we just don’t need for core business operations.”
Brandt said Rogers ‘ second-quarter results “reflect the beginning of a new era for Rogers in Canada’s telecom industry” as they capture the effects of its $ 26 billion merger with Shaanair, which closed in April.
Rogers saw its profit drop by 73 percent to $ 109 million in the quarter, compared with a net income of $ 409 million in the same period last year. The profit amounted to diluted earnings per share of 20 cents for the period ended June 30, up from 76 cents during the previous second quarter.
These drops reflected a continued increase of about $ 500 million in quarterly depreciation and amortization from assets acquired in the Shaanair merger, the company said.
Rogers and Shaanair received final government approval for the deal to move forward at the end of March after agreeing on several terms including the sale of Shaanair’s wireless business, Freedom Mobile, to Quebec-based Videotron Ltd. a subsidiary of Quebecor Inc.
“We’ve seen market share gains in the West, including double-digit subscriber growth, and we expect our share in the West to continue to grow in the coming quarters,” said Rogers president and CEO Tony Staffieri.
“Overall, in these first 15 weeks, we are chasing forward our integration objectives and continue to be impressed with the quality and commitment of the Shaanair team.”
On an adjusted basis, Rogers ‘ net income totaled $ 544 million, a 17 percent increase from $ 463 million during the previous second quarter, while its adjusted diluted earnings per share moved from 86 cents to $ 1.02 per share.
Analysts on average had expected a profit of $ 1.02 per share on a non-regulated basis, according to estimates compiled by financial markets data firm Refinitiv.
Revenue for the period rose 30 percent to $ 5 billion in the most recent quarter, from $ 3.9 billion in the previous second quarter, driven by the company adding 170,000 net postpaid mobile phone subscribers. That’s up 39 percent from 122,000 last year, which Rogers said was the result of running sales and customer satisfaction in a growing Canadian market.
The company noted that it also introduced new 5G plans starting at $ 55 per month.
“As expected, there was some noise in the numbers that will have to be explained due to the breakdown of Shaanair’s results across different sectors,” Td Securities analyst Vince Valentini said in a note.
But he said the “clear takeaway” from Rogers ‘ second-quarter results should be that the wireless company’s organic growth is “very strong” and that Sha.
Rogers saw a seven percent increase in wireless service revenue in the quarter, which was largely the result of increased mobile phone subscribers, the addition of Shaanair customers after the merger, and higher roaming revenue linked to travel growth.
Rogers ‘ monthly growth for net paid mobile phone subscribers was 0.87 percent in the quarter, up from 0.68 percent last year.
Average monthly mobile phone revenue per user was $ 56.79, marking a 3.5 percent decline from the second quarter of last year, which the company attributed to an increase in its mix of lower-cost plans following the acquisition of Shaanair.
“We are focused directly on cost synergies … but we have not lost sight of the thesis of purchase Shaanair, which is on the revenue side — one plus one, how to make them three?”Staffier told analysts.
In an internal memo to staff earlier this month, Staffieri announced that Rogers is offering voluntary leave packages to some employees as it seeks to reduce the overlap in roles following the Shaanair merger. The memo states that those eligible include “most corporate and line of business employees” up to the level of senior director of the company, while most employees in client-facing jobs are not eligible.
Rogers also confirmed that” a small percentage ” of employees have left the company unwillingly since the combination with Shaanair. The company did not say how many employees would be affected by either the Voluntary Departure Program or other cuts.
Meanwhile, Staffieri told analysts on Wednesday that Rogers is reviewing a decision this week by the CRTC, which the federal telecommunications regulator said would help deliver more affordable mobile plans and strengthen competition in the sector.
On Monday, the CRTC ruled in a final bid arbitration procedure between Quebecor and Rogers, which was requested by the companies just days after the ex-Videotron subsidiary bought Freedom Mobile from Shaanair as a takeover request for rogers.
While the two sides had agreed on some fees that Videotron would pay Rogers when offering services using its wireless network, they were unable to reach an agreement on data fees. The CRTC merged with KAS of Quebecor and instructed the two parties to enter into an access agreement so that Videotron “can expand competitive wireless mobile services to Canadians as quickly as possible.”
Staffieri said Rogers is considering next steps, including a possible appeal.
“There is not much I want to say in this call, for obvious reasons, but what I will say in the overall scheme of things, we will not be distracted and we will continue to manage our business and investments accordingly,” he said.
RBC analyst Dreflix McReynolds said the decision could lead to more price competition from Freedom Mobile in the near term.
“Most importantly, the decision involves bad language that is negative to officials in rejecting a full-cost approach that supports a return on investment in the network,” he wrote in an analyst note.
Original 5: 27 am.
Rogers Communications Inc. it saw its profit drop by 73 per cent to $ 109 million in its most recent quarter when it closed its deal to acquire Shaanair Communications Inc.
The Toronto-based telecommunications company says its second-quarter profit compared with a net income of $ 409 million in the same period last year.
The profit amounted to diluted earnings per share of 20 cents for the period ended June 30, up from 76 cents during the previous second quarter.
Rogers says the significant decline in net income and diluted earnings per share reflects a continued increase of approximately $ 500 million in quarterly depreciation and amortization from assets acquired in its $ 26 billion merger with Shaanair, which closed in April.
On an adjusted basis, its net income totaled $ 544 million, a 17 percent increase from $ 463 million during the previous second quarter, while its adjusted earnings per share moved from 86 cents to $ 1.02 per share.
Revenue for the period rose 30 percent to $ 5 billion in the most recent quarter, from $ 3.9 billion in the previous second quarter.
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