Rogers Releases Q2 2012 Financial and Operating Results
Jul 27, 2012 (Close-Up Media via COMTEX) --
Rogers Communications Inc., a communications and media company in Canada, announced its unaudited consolidated financial and operating results for the three months and six months ended June 30, in accordance with International Financial Reporting Standards (IFRS).
"Our revenue and adjusted operating profit growth in the second quarter was highlighted by strong postpaid wireless smartphone sales and customer retention metrics, as well as exceptionally strong margins in both our wireless and cable businesses," said Nadir Mohamed, President and CEO of Rogers Communications Inc. "Despite highly competitive markets, we continued to leverage our technology leadership to deliver new and innovative products and services while at the same time taking decisive actions to drive operational efficiencies. Importantly, our continued generation of strong free cash flow enabled us to return a significant and growing amount of cash to our shareholders in the form of dividends and share buybacks."
In a release on July 24, the Company reported the following highlights of the second quarter of 2012:
-Consolidated quarterly revenue was up modestly, with Wireless network revenue growth of 1 percent, Cable Operations revenue growth of 1 percent, and Media revenue growth of 1 percent, offset by declines in RBS and Wireless equipment sales, versus the same quarter last year. Consolidated adjusted operating profit increased by 3 percent with a 5 percent increase at Wireless and a 2 percent increase at Cable Operations partially offset by a 13 percent decrease at Media.
-Driven by strong 48 percent adjusted operating profit margins at both Wireless and Cable Operations, consolidated margins of 41 percent were up 90 basis points from the same period last year and up 390 basis points on a sequential basis from the first quarter 2012. Adjusted net income improved 2 percent from the same quarter last year, while adjusted diluted earnings per share of 91 cents were up 6 cents or 7 percent year over year.
-Generated $656 million of consolidated pre-tax free cash flow in the quarter, defined as adjusted operating profit less PP&E expenditures and interest on long-term debt (net of capitalization), an increase of 16 percent compared to the second quarter of 2011 and reflecting the 3 percent increase in adjusted operating profit combined with a 12 percent decrease in the level of PP&E expenditures. Pre-tax free cash flow per share increased by 22 percent over the same period reflecting accretion from share buybacks which have decreased the base of outstanding shares.
-Wireless data revenue grew by 13 percent and net postpaid subscriber additions totalled 87,000, helping drive wireless data revenue to now comprise 39 percent of Wireless network revenue compared to 35 percent in the same quarter last year. During the second quarter, Wireless activated 629,000 smartphones, of which approximately 36 percent were for subscribers new to Wireless. This resulted in subscribers with smartphones, who typically generate ARPU nearly twice that of voice only subscribers, representing 63 percent of the overall postpaid subscriber base as at June 30, up from 48 percent as at June 30, 2011.
-Expanded Canada's first and largest Long Term Evolution ("LTE") 4G broadband wireless network to more Canadian cities including Calgary, Halifax and St. John's offering speeds that are between three and four times faster than previous technologies. Rogers LTE network now reaches close to 35 percent of the Canadian population and its reach will increase to nearly 60 percent of the Canadian population by the end of the year. Rogers currently offers the largest selection of LTE devices of any carrier in Canada. In 2011, Rogers was first to launch LTE in Canada in Ottawa followed by Toronto, Montreal, Vancouver and surrounding areas.
-Announced together with CIBC the launch of Canada's first mobile payment solution that allows Canadians to pay for purchases with their CIBC credit card at the checkout counter using an enabled Rogers smartphone at businesses across the country where contactless credit card payments are already accepted. Rogers has been at the forefront of laying the foundation and developing the ecosystem to allow mobile commerce to flourish and this is one of the first solutions of its kind anywhere in the world.
-Introduced the new Rogers "FLEXtab" wireless hardware upgrade program giving customers even more flexibility to opt for an early wireless device upgrade by paying a prorated portion of the subsidy at any point after one month during their contract term.
-Rogers announced an alliance with Axeda Corp. that will accelerate the deployment and reduce the complexity around the development of machine-to-machine ("M2M") solutions in Canada by providing businesses and developers access to the Axeda Platform to build and deploy enterprise M2M applications. Rogers also announced the formation of an alliance with international mobile operators KPN, NTT Docomo, SingTel, Telefonica, Telstra and Vimpelcom to cooperate on global M2M business initiatives supporting a single, global platform that multinational customers can leverage to enable connected devices in multiple countries to better manage operations and reduce costs. Rogers is Canada's M2M leader, committed to providing the enterprise tools and platforms that enable rapid delivery of next-generation M2M connectivity cross various industries and market segments.
-Rogers Business Solutions announced the availability of SIP Trunking, a new IP-based voice solution for enterprises designed to complement its fibre-based Internet and WAN connectivity services. By merging voice services with a business's data network, SIP Trunking solutions dynamically allocate bandwidth as needed to support voice and/or data needs depending upon capacity requirements during peak hours, and also provides a platform for next gen IP-based video, mobile and productivity applications and services.
-Rogers Media launched Citytv Saskatchewan following its acquisition of Saskatchewan Communications Network, marking the first step in Citytv's recent geographic expansion towards a national footprint. Once regulatory approval for Media's pending acquisition of Metro14 Montreal is received, it will enable the further expansion of Citytv into the key Quebec market. Media also announced that Citytv and Jim Pattison Broadcast Group signed long-term affiliate agreements that will deliver Citytv programming to audiences on all three of Pattison's television stations in Western Canada. With these acquisitions and agreements, Citytv's reach will increase by more than 20 percent to over 80 percent of Canadian households.
-Made significant progress towards the completion of Rogers' 37.5 percent investment in Maple Leaf Sports & Entertainment ("MLSE") having gained the necessary sports league and Competition Bureau clearances. This investment in MLSE advances Rogers' strategy to deliver highly sought-after content anywhere, anytime, on any platform across its broadband and wireless networks and its media assets, while strengthening the value of its Sportsnet brand. Pending approval by the CRTC, the transaction is currently expected to close during the third quarter of 2012.
-Issued $1.1 billion of debt securities at among the lowest coupon rates ever attained in the Canadian market for similar terms. The offering consisted of $500 million of 3.0 percent Senior Notes due 2017 and $600 million of 4.0 percent Senior Notes due 2022. The net proceeds from the offering were used to repay amounts outstanding under Rogers' bank credit facility and for general corporate purposes which may include, among other things, funding all or a portion of Rogers' investment in a 37.5 percent ownership interest in MLSE.
-Repurchased 9.6 million RCI Class B Non-Voting shares during the quarter for $350 million under our $1.0 billion share buyback authorization, and paid dividends on our common shares of $207 million, in total returning $557 million of cash to shareholders, a $362 million increase from second quarter of 2011.
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