Quebecor Q2 stable, with strong wireless adds

Quebecor Inc. posted second quarter returns Thursday that beat analyst expectations, primarily on the back of strong wireless and home internet additions, despite the effects of the COVID-19 pandemic across the sector. In wireless metrics, June was the best month for the company in four years, according to Videotron CEO Jean-François Pruneau. "We were clearly the first operator out of the gate, thereby allowing us to bring back most of our employees that were temporarily laid off," Pruneau told analysts on a Thursday morning quarterly earnings call. "As a result we witnessed a very strong performance in June, both in terms of gross adds and service contract renewals -- our best monthly performance in the last four years, and confirming the readiness and effectiveness of our operating decisions and marketing strategies," he said. According to a note published by Canaccord Genuity analyst Aravinda Galappatthige Thursday morning, both wireless and internet subscriber additions "sharply beat market expectations." Pruneau told analysts that the strength of the wireless additions was also partly down to its flanker brand, Fizz, and its ability to function in an era of social distancing. "That's the business model of Fizz, the no contact model. Everything is digital, and it obviously attracted a lot of people to subscribe to wireless through Fizz," he said, while declining to break out the number of additions between the Videotron and Fizz brands. Overall revenue dipped five per cent to $1 billion, from $1.06 billion this time last year, while the company's profits were up to $174 million, from $138.4 million in the second quarter of 2019. In wireless, revenue was up to $159.7 million from $146.4 million a year ago for a growth of 9.1 per cent, and the company added some 35,100 net wireless subscribers, bringing the total up to 1,404,900 wireless subscribers from 1,369,800 this time last year. In home internet, revenue was essentially flat at $276.1 million, just down from the $278.7 million the company reported a year ago for a decrease of just under one per cent, and they added some 17,200 subscribers, for a total of 1,753,100 internet subscribers. This past week, the company announced it was expanding its broadband services to the Abitibi region. Television revenues were down to $227.8 million from the 247.5 million they reported in 2019, and the company lost 14,800 subscribers, leaving them with a total of 1,497,300 television subscribers at quarter's end. Mobile average billing per user was down 4.3 per cent to $50.32 from $52.56 this time last year. Pruneau said 75 per cent of that reduction was due to the loss of overage and roaming revenues during the pandemic, which has hurt per user metrics across the industry. He also cited the influx of of bring-your-own-device customers into the wireless business. "We feel confident that once we have cycled through the BYOD customer base, that is going to start growing," Pruneau told analysts. — With reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Adam Langenberg at alangenberg@thewirereport.ca

Quebecor Q2 stable, with strong wireless adds

News | August 6, 2020

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