Quebecor Inc reported its consolidated financial results for the third quarter of 2009. Quebecor consolidates the financial results of its Quebecor Media Inc. subsidiary ("Quebecor Media"), in which it holds a 54.7% interest.
"Quebecor's results trended strongly upward in the third quarter of 2009 with a 51.9% increase in net income to $69.4 million, or $1.08 per basic share," said Pierre Karl Peladeau, President and Chief Executive Officer of Quebecor. "Videotron again posted a significant increase in operating income, reflecting customer growth for all its services for the 17th consecutive quarter. At the same time, Videotron is pressing ahead with its advanced wireless services network project. As of September 30, 2009, all service and switching platforms had been installed, as well as the interconnections with Videotron's existing network. The build-out of antenna sites is proceeding on schedule. For nearly 60% of these sites, leases have been signed or tower-sharing requests accepted and the equipment is being installed. Meanwhile, in the News Media segment, cost-cutting efforts continued to pay off. Total year-to-date savings generated by these initiatives are estimated at $45.0 million."
Highlights since end of second quarter 2009
- Quebecor records revenues of $918.4 million, up $10.3 million (1.1%) from third quarter 2008.
- Operating income (1): up $23.6 million (8.5%) to $301.0 million.
- Net income: $69.4 million ($1.08 per basic share), up $23.7 million ($0.37 per basic share) or 51.9% from $45.7 million ($0.71 per basic share) in the same period of 2008.
- Adjusted income from continuing operating activities (2): $52.9 million ($0.82 per basic share), up $10.4 million ($0.16 per basic share), or 24.5%, from $42.5 million ($0.66 per basic share) in the same period of 2008.
- Telecommunications segment: operating income up $34.7 million (17.3%). Customer growth in third quarter 2009: +44,300 for cable telephone service, +35,500 for cable Internet access, +27,100 for cable television service (including 52,100-customer increase for illico Digital TV), +6,300 activated phones for wireless telephone service.
- illico Digital TV service provided by Videotron Ltd. ("Videotron") passes million-subscriber mark.
- Restructuring and other cost-reduction initiatives in News Media segment generate estimated savings of $45.0 million in first nine months of 2009.
Event after end of third quarter 2009
With respect to the Part II fees payable to the CRTC, Videotron and TVA Group Inc. ("TVA Group") agreed on an out-of-court settlement on October 7, 2009 whereby they withdrew their legal challenge and monetary claims, and the government agreed not to claim the unpaid Part II fees for the period of September 1, 2006 through August 31, 2009. In view of this settlement, Quebecor will reverse in the fourth quarter of 2009 provisions totalling $42.8 million for unpaid Part II fees as of August 31, 2009. Under the out-of-court settlement, the government also undertook to recommend that the CRTC amend its regulations to limit the amount of the Part II fees for periods subsequent to August 31, 2009. To date, however, the current regulatory rate remains applicable to Quebecor and will continue to apply until such time as it is amended by the CRTC.