Rogers Reports First Quarter 2009 Financial and Operating Results
TORONTO - Rogers Communications Inc. announced its
consolidated financial and operating results for the three months ended March
First Quarter Consolidated Revenue Grows 5% to $2.7 Billion;
Adjusted Operating Profit Growth at Cable Operations of 9%
is Partially Offset by Costs From Successful Smartphone Campaign,
Reductions in Roaming and Other Discretionary Usage at Wireless,
and Advertising Revenue Declines at Media;
Wireless Holds ARPU Steady While Further Lowering Churn,
Accelerating Wireless Data Revenue Growth to 43% and
Driving 48% Network Revenue Margins;
Cable Drives Continued Year-Over-Year Margin Expansion
and Healthy Growth in Cash Flow
Highlights of the first quarter of 2009 include the following:
- Generated growth in quarterly revenue of 5%, while adjusted operating
profit grew 2% to $1.005 billion as the growth at Cable was partially
offset by acquisition and retention costs from the continued
successful smartphone campaign at Wireless and advertising revenue
declines at Media.
- Wireless network revenue grew by 8% year-over-year driven by postpaid
net subscriber additions of 104,000, data revenue growth accelerating
by 43% to 20% of network revenue, and a further reduction of postpaid
churn to 1.09%.
- Wireless activated more than 360,000 smartphone devices during the
quarter. Approximately 40% of these activations were to subscribers
new to Wireless with the other 60% being to existing Wireless
subscribers who upgraded devices, committed to new term contracts,
and in most cases attached both voice and monthly data packages which
generate considerably above average ARPU. The results of this
continued successful smartphone campaign drove significantly higher
acquisition and retention costs at Wireless.
- Cable's Internet subscriber base continued to grow during the quarter
and penetration is approximately 44% of the homes passed by our cable
networks and 68% of our basic cable customer base. In addition,
digital penetration now represents approximately 69% of basic cable
households, of which more than 619,000 households now receive high-
definition television ("HDTV") services.
- Cable ended the quarter with 857,000 residential voice-over-cable
telephony lines, which brings the total penetration of cable
telephony lines to 37% of basic cable subscribers, up from 31% at
March 31, 2008.
- Wireless announced the expansion of its advanced 3G voice and data
network to 48 new sites in Northern Alberta to provide broader
service to residents in the region and a range of business solutions
to local businesses, including those in the oil and gas industry.
- At March 31, Rogers had approximately $1.8 billion in available
credit under its $2.4 billion committed bank credit facility that
matures in July, 2013, and no scheduled debt maturities until May
2011. This financial position provides us with substantial liquidity
- Rogers announced on February 18 that its Board of Directors had
approved a 16% increase in the annualized dividend rate to $1.16 per
share and immediately declared a quarterly dividend of $0.29 a share
on each of its outstanding shares at the new, higher rate. In
addition, the Board approved the renewal of a normal course issuer
bid ("NCIB") to repurchase up to $300 million of Rogers' Class B
shares on the open market during the following twelve months.
- On March 30, Rogers announced the appointment of Nadir Mohamed as
President and Chief Executive Officer. This appointment followed an
extensive search carried out by our Board of Directors following the
December 2008 passing of company founder and Chief Executive Officer
Ted Rogers. A communications industry veteran with more than 25 years
of experience, Nadir Mohamed was previously President and Chief
Operating Officer of Rogers' Communications Group division, which
included our Wireless and Cable businesses.
"The strength of our franchises is reflected in our first quarter
results," said Nadir Mohamed, President and Chief Executive Officer. "We
delivered positive subscriber trends, expanded margins, and accelerated data
revenue growth at Wireless, while Cable further expanded margins and
meaningfully grew its cash flow, and Media continued to adjust its cost
structure and position itself to emerge from the economic downturn with
greater share and stronger ratings."
"While Rogers is operating from a position of business and financial
strength, we are clearly negotiating through challenging times and have much
hard work in front of us to drive the performance of the business forward,"
continued Mohamed. "We will build upon our solid foundation by driving
continuous enhancements to our customer experience, by improving our operating
and capital efficiency and by continuing to deliver innovative services and
leading edge technologies that our customers have come to expect."
This management's discussion and analysis ("MD&A"), which is current as
of April 28, 2009, should be read in conjunction with our First Quarter 2009
Interim Unaudited Consolidated Financial Statements and Notes thereto, our
2008 Annual MD&A and our 2008 Annual Audited Consolidated Financial Statements
and Notes thereto. The financial information presented herein has been
prepared on the basis of Canadian generally accepted accounting principles
("GAAP") for interim financial statements and is expressed in Canadian
dollars. Please refer to Note 25 of our 2008 Annual Audited Consolidated
Financial Statements for a summary of the differences between Canadian GAAP
and United States ("U.S.") GAAP for the year ended December 31, 2008.
In this MD&A, the terms "we", "us", "our", "Rogers" and "the Company"
refer to Rogers Communications Inc. and our subsidiaries, which are reported
in the following segments:
- "Wireless", which refers to our wireless communications operations,
including Rogers Wireless Partnership ("RWP") and Fido Solutions Inc.
- "Cable", which refers to our wholly-owned cable television
subsidiaries, including Rogers Cable Communications Inc. ("RCCI") and
its subsidiary, Rogers Cable Partnership; and
- "Media", which refers to our wholly-owned subsidiary Rogers Media
Inc. and its subsidiaries, including Rogers Broadcasting, which owns
a group of 52 radio stations, the Citytv television network, the
Rogers Sportsnet television network, The Shopping Channel, the OMNI
television stations, and Canadian specialty channels including The
Biography Channel Canada, G4TechTV and Outdoor Life Network; Rogers
Publishing, which publishes approximately 70 magazines and trade
journals; and Rogers Sports Entertainment, which owns the Toronto
Blue Jays Baseball Club ("Blue Jays") and Rogers Centre. Media also
holds ownership interests in entities involved in specialty
television content, television production and broadcast sales.