Rogers Ceo says Sha been integrated ahead of schedule in earnings report

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Integration of Shaanair Communications Inc. By Rogers Communications Inc. RCI-B-T after a $ 20 billion acquisition is ahead of schedule, Rogers said Wednesday in reporting second-quarter results that fell short of analysts ‘ expectations despite a strong gain in wireless subscribers.

Toronto-based telecom reported revenue of $ 5.05 billion for the three-month period ended June 30, up 30 percent from $ 3.87 billion a year earlier.

Profit was $ 109 million, down 73 percent from last year’s $ 409 million second quarter. It was 20 cents per share, down from 76 cents.

The results include a full quarter of Shaflix’s financial results for the first time.

Rogers attributed the significant decline in its net income to a continued increase of approximately $ 500 million in depreciation and amortization quarterly related to the Shaanair takeover, which closed on April 3.

After adjusting for part of that depreciation and amortization, as well as other items, the company earned $ 544 million, up from $ 463 million. Adjusted earnings came to $ 1.02 per share, up from 86 cents.

That still fell short of analysts ‘ expectations of $ 1.13 of adjusted earnings per share and revenue of $ 5.07 billion, according to the consensus estimate from S&P Capital IQ.

Rogers Chief Financial Officer Glenn Brandt said the company will sell up to $ 1 billion in non-core assets, mostly surplus real estate, after taking on billions of dollars in debt to fund the acquisition.

The company added 170,000 new postpaid wireless subscribers during the quarter, up from 122,000 during the same period last year. (Postpaid subscribers are those who are billed at the end of the month for the services they have used, while prepaid customers pay in advance for wireless services.)

TD Securities analyst Vince Valentini called the wireless division’s growth ” very strong, with records and better than expected postpaid adds.”

The Telecom also boosted annual guidance for adjusted ebitda (earnings before interest, taxes, depreciation and amortization) and free cash flow. Rogers is now forecasting an adjusted EBITDA growth of 33 percent to 36 percent for 2023, from an increase of 31 percent to 35 percent. Its free cash flow for this year is expected to be in the range of $ 2.2 billion to $ 2.5 billion, up from its previous guidance of $ 2 billion to $ 2.2 billion.

The company also reaffirmed its previous guidance to realize at least $ 200 million in synergies this year from the acquisition and annual cost synergies of at least $ 600 million by the end of the first quarter of 2024.

Roughly a quarter, or $ 48 million, of $ 200 million has already been identified and realized, the company said.

“Above all, in these first 15 weeks we are pursuing our integration objectives and we continue to be impressed with the quality and commitment of the Shaanair team,” Rogers chief executive Tony Staffieri told analysts during a telephone conference on Wednesday.

Desjardins analyst Jmportrome Dubreuil said” recent industry turmoil ” such as the price wars that broke out among telecoms in the wake of the acquisition have yet to show up in financial results.

“Overall, we see the results as a good start to the Shaanair integration and are encouraged in light of increased wireless competition and recent share price performance,” Dubreuil said in a note to clients.

“That said, We remain on the sidelines as the impact of shifts in competition can be gradual,” he added.

Rogers shares rose 4.5 percent, or $ 2.69, on the Toronto Stock Exchange in late-morning trading to $ 61.84.