Mr. Pierre Peladeau reports
QUEBECOR INC. REPORTS CONSOLIDATED RESULTS FOR FIRST QUARTER 2012
Quebecor Inc. has released its consolidated financial results for the first quarter of 2012. Quebecor consolidates the financial results of its Quebecor Media Inc. subsidiary in which it holds a 54.7-per-cent interest.
First quarter 2012 highlights
- Revenues of $1.06-billion, up $73.5-million (7.4 per cent) from the first quarter
- Operating income up $27.9-million (9.5 per cent) to $322.2-million;
- Net income attributable to shareholders of $72.9-million ($1.15 per basic
share), up $38.6-million (62 cents per basic share) from $34.3-million
(53 cents per basic share) in the first quarter of 2011;
Adjusted income from continuing operations of $39.3-million (62 cents per
basic share), up $3.4-million (six cents per basic share) from $35.9-million
(56 cents per basic share) in the first quarter of 2011;
- In the first quarter of 2012, Videotron Ltd. showing revenue increase from Internet access services ($23.0-million or 13.7 per cent), cable television service ($22.4-million or 9.1 per cent),
mobile telephony service ($16.9-million or 81.6 per cent) and cable telephony
service ($4.4-million or 4.1 per cent); telecommunications segment's
operating income up $48.5-million (19.1 per cent).
"Quebecor's revenues and operating income increased 7.4 per cent and 9.5 per cent, respectively, in the first quarter of 2012, once again reflecting the telecommunications segment's sustained performance," said Pierre Karl Peladeau, president and chief executive officer of Quebecor. "Revenues increased significantly for all of Videotron's main services, driving the telecommunications segment's operating income up $48.5-million or 19.1 per cent from the first quarter of 2011. The number of subscriber connections to the mobile telephony service stood at 312,800 as of March 31, 2012, an increase of 22,200. Videotron also announced the launch of illico TV new generation, featuring an entirely new interface for accessing digital services, and innovative functionalities that support smoother and more intuitive navigation. Videotron continues to reinvent its services in order to deliver a consistently superior customer experience to subscribers.
"Another highlight of the first quarter of 2012 was the 2012 season of Star Academie, broadcast on the TVA Network. The program has become a Quebec institution and has positive ripple effects across Quebecor Media's properties. The weekly galas were seen by an average of 2.2 million viewers and the Star Academie 2012 CD has sold more than 125,000 copies to date, topping the Canadian French language charts. The show and its tie-in products have achieved very important penetration in the Quebec French language market.
"In the news media segment, the Canoe network logged 10.5 million unique visitors in March, 2012, up 12.9 per cent from December, 2011, because of Sun Media Corp.'s successful new approach for the websites of its urban dailies and community newspapers. This new milestone confirms Canoe's strong position in the Canadian marketplace. In Quebec, it now ranks second, just behind behemoth Google.
"The new exclusive agreement to distribute the Sears Canada Inc. national flyer in the Le Sac Plus doorknob bag, that will be supported by a multiplatform media campaign in all our media properties, is another example of the complementary fit among our multiproduct offerings. Meanwhile, Quebecor MediaPages launched the [Videotron Smart Find website] and [Videotron Trouve Tout website] search engines, a new Web and mobile platform that supports consumer searches for local merchants. Finally, Sun Media Corp. launched four new community weeklies in Ottawa, Windsor, Kitchener-Waterloo and Guelph, which will reach more than 400,000 Ontario households.
"However, the financial results of the news media and broadcasting segments continued to be adversely affected by the impact of increased competition and the economic environment for the advertising market, as well as the significant capital expenditures required for the launch of new products and services.
"In the leisure and entertainment segment, Archambault Group Inc. launched ZIK, a music streaming service that offers unlimited interactive access to more than 12 million tracks, including the largest selection of French language music with 1.2 million titles. ZIK positions Archambault Group at the forefront of a technological, musical and cultural revolution. The service puts Quebec culture and artists front and centre, while offering unique editorial content.
"Finally, in late March, 2012, Quebecor Media and Quebec City announced the finalization of the functional and technical program for the multipurpose arena to be built in Quebec City. Construction is slated to begin in September, 2012.
"This year, we are beginning to reap the fruit of our investments in our various businesses over the past three years, as the large increases in operating income and cash flows in our telecommunications segment tend to indicate. The excellent first quarter results mark a positive start to 2012, a year that should see a number of attractive projects that hold considerable promise for the corporation's long-term development and profitability."
QUEBECOR FIRST QUARTER FINANCIAL HIGHLIGHTS, 2008 TO 2012
(In millions of dollars, except per share data)
2012 2011 2010 2009 2008
Revenues $1,064.0 $990.5 $948.1 $903.3 $884.7
Operating income 322.2 294.3 290.4 272.2 256.7
Net income from continuing
operations attributable to
shareholders 72.9 34.3 34.9 57.7 45.1
Net income attributable to
shareholders 72.9 34.3 34.9 57.7 428.4
Adjusted income from continuing
operations 39.3 35.9 43.4 43.1 34.6
Per basic share
Net income from continuing
operations attributable to
shareholders 1.15 0.53 0.54 0.90 0.70
Net income attributable to
shareholders 1.15 0.53 0.54 0.90 6.66
Adjusted income from
continuing operations 0.62 0.56 0.67 0.67 0.54
2012/2011 first quarter comparison
Revenues: $1.06-billion, an increase of $73.5-million (7.4 per cent)
- Revenues increased in telecommunications ($62.6-million or 10.7 per cent of
segment revenues), broadcasting ($10.7-million or 10.0 per cent), interactive
technologies and communications ($9.8-million or 36.6 per cent), and leisure and
entertainment ($5.7-million or 9.3 per cent).
- Revenues decreased in news media ($7.0-million or minus 2.9 per cent).
Operating income: $322.2-million, an increase of $27.9-million (9.5 per cent)
Operating income increased in telecommunications ($48.5-million or 19.1 per cent
of segment operating income) and interactive technologies and
communications ($2.1-million or 233.3 per cent).
- Operating income decreased in news media ($11.7-million or minus 41.3 per cent),
broadcasting ($10.4-million), and leisure and entertainment ($900,000
or minus 75.0 per cent).
- The change in the fair value of Quebecor Media stock options resulted in
a $4.7-million unfavourable variance in the stock-based compensation
charge in the first quarter of 2012 compared with the same period of
2011. The change in the fair value of Quebecor stock options resulted in
a $6.5-million unfavourable variance in the corporation's stock-based
compensation charge in the first quarter of 2012.
- Excluding the impact of the consolidated stock-based compensation
charge, the increase in operating income in the first quarter of 2012
would have been 13.5 per cent, compared with a 5.9-per-cent decrease in the same period
Net income attributable to shareholders: $72.9-million ($1.15 per basic share) compared with $34.3-million (53 cents per basic share) in the first quarter of 2011, an increase of $38.6-million (62 cents per basic share)
- The increase was due mainly to:
- $71.4-million favourable variance in gain on valuation and
translation of financial instruments;
- $27.9-million increase in operating income;
- $8.4-million favourable variance in the charge for restructuring of
operations, impairment of assets and other special items.
- Offset by:
- $20.5-million increase in amortization charge;
- $14.5-million goodwill impairment charge recognized in the first quarter
Adjusted income from continuing operations: $39.3-million in the first quarter of 2012 (62 cents per basic share) compared with $35.9-million (56 cents per basic share) in the first quarter of 2011, an increase of $3.4-million (six cents per basic share)
- In March, 2012, Videotron issued $800.0-million (U.S.) principal amount of 5-per-cent
senior notes maturing in 2022.
- In March, 2012, Videotron redeemed all of its 6-7/8ths-per-cent senior notes
maturing in January, 2014, in the aggregate principal amount of $395.0-million (U.S.).
- In March and April, 2012, Quebecor Media redeemed $260.0-million
(U.S.) aggregate principal amount of its 7-3/4ths-per-cent senior notes maturing in March,
2016, and settled hedging contracts.
- Quebecor Media and TVA Group Inc. amended their bank
credit facilities to extend the maturity dates to 2016 and 2017,
respectively, and added a new $200.0-million revolving credit facility
for Quebecor Media, maturing in 2016.
- Sun Media Corp. repaid the $37.6-million balance on its term loan
credit facility and cancelled all its credit facilities.
On May 8, 2012, the board of directors of Quebecor declared a quarterly dividend of five cents per share on Class A multiple voting shares and Class B subordinate voting shares, payable on June 19, 2012, to shareholders of record at the close of business on May 25, 2012. 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.
Detailed financial information
For a detailed analysis of Quebecor's first quarter 2012 results, please refer to the management discussion and analysis and consolidated financial statements of Quebecor, available on the corporation's website from the SEDAR filing service.
Conference call for investors and webcast
Quebecor will hold a conference call to discuss its first quarter 2012 results on May 9, 2012, at 3:30 p.m. Eastern Standard Time. There will be a question period reserved for financial analysts. To access the conference call, please dial 1-877-293-8052. The access code for participants is 58308 followed by the number sign. A tape recording of the call will be available from May 9, 2012, to Aug. 9, 2012, by dialling 1-877-293-8133, conference No. 771360 followed by the number sign, access code for participants 58308 followed by the number sign. The conference call will also be broadcast live on Quebecor's website. It is advisable to ensure the appropriate software is installed before accessing the call.
We seek Safe Harbor.