Quebecor Inc. Reports Consolidated Results for Third Quarter 2012
(firmenpresse) - MONTREAL, QUEBEC -- (Marketwire) -- 11/13/12 -- Quebecor Inc. ("Quebecor" or the "Corporation") (TSX: QBR.A)(TSX: QBR.B) today reported its consolidated financial results for the third quarter of 2012. Quebecor consolidates the financial results of its Quebecor Media Inc. ("Quebecor Media") subsidiary. The Corporation's interest in Quebecor Media increased from 54.7% to 75.4% on October 11, 2012 as a result of the purchase of part of the interest held by CDP Capital d'Amerique Investissement inc. ("CDP Capital"), a subsidiary of the Caisse de depot et placement du Quebec.
Third quarter 2012 highlights
"The Corporation continued its growth in the third quarter of 2012 despite a fiercely competitive business environment in most of its lines of business," said Pierre Karl Peladeau, President and Chief Executive Officer of Quebecor. "It increased its revenues by 4.4%, its operating income by 10.4% and its adjusted income from continuing operations by 30.2%, confirming the profitability of the major investments made in recent years."
"We are very satisfied with the growth recorded by Videotron in the third quarter of 2012," said Robert Depatie, President and Chief Executive Officer of Videotron. "Revenues from Videotron's main services were all up substantially, enhancing the Telecommunications segment's operating income by $34.5 million, a significant 12.5% increase. Videotron recorded a net increase of 101,100 revenue generating units and a 7.7% increase in average monthly revenue per user compared with the same period of the previous year. It is noteworthy that the cable television subscriber losses recorded in the second quarter of 2012, during the moving season, were almost entirely made up in the third quarter of 2012. In the 12-month period ended September 30, 2012, the total number of revenue generating units increased by 264,600 (5.8%). Subscriber additions to the mobile network since its launch have contributed to customer growth and increase in profitability. Videotron stands out among Canada's major telecommunications carriers with the highest quarterly growth rate in operating income."
"A major event that has occurred since the end of the second quarter of 2012 will mark Quebecor's history: the purchase of part of CDP Capital's interest in Quebecor Media for $1.50 billion," said Jean-Francois Pruneau, Chief Financial Officer of Quebecor. "This transaction will enable the Corporation to benefit from the growth we anticipate for this subsidiary in the coming years, while continuing its partnership with CDP Capital. It was carried out in accordance to the Corporation's fundamental financial objectives of maintaining a sufficient level of operational and financial flexibility. This transaction was a positive for both our financial partner, which has supported us since the creation of Quebecor Media in 2000, and our shareholders."
To allow the News Media segment the decision-making and operational flexibility it needs to respond effectively to the profound upheaval in the media industry around the world, Sun Media Corporation undertook a comprehensive review of its approach and business processes. Its innovative plan will streamline decision-making and operational structures in order to achieve greater efficiency in all activities, from the editorial to the industrial operations. Sun Media Corporation is also planning to redesign its sales activities to strengthen its business strategy. At a time of negative growth in the industry, maintaining reasonable cost-effectiveness is essential. This objective will be achieved in the News Media segment through improved execution and greater responsiveness to customer' needs and to local and national business opportunities, combined with the estimated annual savings of more than $45.0 million that will be generated by the new program.
In summary, the third quarter of 2012 was marked by excellent financial results and by ongoing restructuring and adaptation efforts by the Corporation's segments. In addition, immediately after the end of the quarter, the Corporation concluded one of the largest financial transactions in the history of Quebecor Media aimed at continuing the achievement of its business development, profitability and growth objectives.
2012/2011 third quarter comparison
Revenues: $1.06 billion, an increase of $44.3 million (4.4%).
Operating income: $352.8 million, an increase of $33.1 million (10.4%).
Net income attributable to shareholders: $18.6 million ($0.30 per basic share) compared with $26.1 million ($0.41 per basic share) in the third quarter of 2011, a decrease of $7.5 million ($0.11 per basic share).
Partially offset by:
Adjusted income from continuing operations: $52.1 million in the third quarter of 2012 ($0.83 per basic share) compared with $40.0 million ($0.63 per basic share) in the same quarter of 2011, an increase of $12.1 million ($0.20 per basic share).
2012/2011 year-to-date comparison
Revenues: $3.21 billion, an increase of $150.8 million (4.9%).
Operating income: $1.03 billion, an increase of $60.3 million (6.2%).
Net income attributable to shareholders: $158.5 million ($2.50 per basic share) compared with $115.6 million ($1.80 per basic share) in the first nine months of 2011, an increase of $42.9 million ($0.70 per basic share).
Partially offset by:
Adjusted income from continuing operations: $140.1 million in the first nine months of 2012 ($2.22 per basic share) compared with $135.9 million ($2.12 per basic share) in the same period of 2011, an increase of $4.2 million ($0.10 per basic share).
Financing activities
Following the completion of these transactions, Quebecor's interest in Quebecor Media increased from 54.7% to 75.4% and CDP Capital's interest decreased from 45.3% to 24.6%.
Dividends
On November 12, 2012, the Board of Directors of Quebecor declared a quarterly dividend of $0.05 per share on Class A Multiple Voting Shares ("Class A shares") and Class B shares payable on December 24, 2012 to shareholders of record at the close of business on November 29, 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.
Normal course issuer bid
On August 9, 2012, the Corporation filed a normal course issuer bid to purchase for cancellation a maximum of 980,357 Class A shares, representing approximately 5% of the issued and outstanding Class A shares, and a maximum of 4,351,276 Class B shares, representing approximately 10% of the public float for Class B shares as of July 31, 2012. Purchases can be made from August 13, 2012 to August 12, 2013 at prevailing market prices, on the open market, through the facilities of the Toronto Stock Exchange. All shares purchased under the bid have been or will be cancelled.
During the third quarter of 2012, the Corporation purchased and cancelled 585,100 Class B shares for a total cash consideration of $20.5 million. The excess of $16.1 million in the purchase price over the carrying value of the repurchased Class B shares was recorded as a reduction in retained earnings.
During the first nine months of 2012, the Corporation purchased and cancelled 728,500 Class B shares for a total cash consideration of $25.8 million. The excess of $20.3 million in the purchase price over the carrying value of the repurchased Class B shares was recorded as a reduction in retained earnings.
Detailed financial information
For a detailed analysis of Quebecor's third quarter 2012 results, please refer to the Management Discussion and Analysis and consolidated financial statements of Quebecor, available on the Corporation's website at: or from the SEDAR filing service at .
Conference call for investors and webcast
Quebecor will hold a conference call to discuss its third quarter 2012 results on November 13, 2012, at 11 a.m. EST. There will be a question period reserved for financial analysts. To access the conference call, please dial 1 877 293-8052, access code for participants 58308#. A tape recording of the call will be available from November 13 to December 9, 2012 by dialling 1 877 293-8133, conference number 860735#, access code for participants 58308#. The conference call will also be broadcast live on Quebecor's website at . It is advisable to ensure the appropriate software is installed before accessing the call. Instructions and links to free player downloads are available at the Internet address shown above.
Cautionary statement regarding forward-looking statements
The statements in this press release that are not historical facts are forward-looking statements and are subject to significant known and unknown risks, uncertainties and assumptions which could cause Quebecor's actual results for future periods to differ materially from those set forth in the forward-looking statements. Forward-looking statements may be identified by the use of the conditional or by forward-looking terminology such as the terms "plans," "expects," "may," "anticipates," "intends," "estimates," "projects," "seeks," "believes," or similar terms, variations of such terms or the negative of such terms. Certain factors that may cause actual results to differ from current expectations include seasonality (including seasonal fluctuations in customer orders), operating risk (including fluctuations in demand for Quebecor's products and pricing actions by competitors), insurance risk, risks associated with capital investment (including risks related to technological development and equipment availability and breakdown), environmental risks, risks associated with labour agreements, risks associated with commodities and energy prices (including fluctuations in the cost and availability of raw materials), credit risk, financial risks, debt risks, risks related to interest rate fluctuations, foreign exchange risks, risks associated with government acts and regulations, risks related to changes in tax legislation, and changes in the general political and economic environment. Investors and others are cautioned that the foregoing list of factors that may affect future results is not exhaustive and that undue reliance should not be placed on any forward-looking statements. For more information on the risks, uncertainties and assumptions that could cause Quebecor's actual results to differ from current expectations, please refer to Quebecor's public filings available at less than than and including, in particular, the "Risks and Uncertainties" section of Quebecor's Management Discussion and Analysis for the year ended December 31, 2011.
The forward-looking statements in this press release reflect Quebecor's expectations as of November 13, 2012, and are subject to change after that date. Quebecor expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
The Corporation
Quebecor Inc. (TSX: QBR.A)(TSX: QBR.B) is a holding company with a 75.4% interest in Quebecor Media Inc., one of Canada's largest media groups, with more than 16,000 employees. Quebecor Media Inc., through its subsidiary Videotron Ltd., is an integrated communications company engaged in cable television, interactive multimedia development, Internet access services, cable telephony and mobile telephony. Through Sun Media Corporation, Quebecor Media Inc. is the largest publisher of newspapers in Canada. It also operates Canoe.ca and its network of English- and French-language Internet properties in Canada. In the broadcasting sector, Quebecor Media Inc. operates, through TVA Group Inc., the number one French-language conventional television network in Quebec, a number of specialty channels, and, through Sun Media Corporation, the English-language SUN News channel. Another subsidiary of Quebecor Media Inc., Nurun Inc., is a major interactive technologies and communications agency with offices in Canada, the United States, Europe and Asia. Quebecor Media Inc. is also active in magazine publishing (Publications TVA Inc.), book publishing and distribution (Sogides Group Inc., CEC Publishing Inc.), the production, distribution and retailing of cultural products (Archambault Group Inc., TVA Films), video game development (BlooBuzz Studios, L.P.), DVD, Blu-ray disc and videogame rental and retailing (Le SuperClub Videotron ltee), the printing and distribution of community newspapers and flyers (Quebecor Media Printing Inc., Quebecor Media Network Inc.), news content production and distribution (QMI Agency), multiplatform advertising solutions (QMI Sales) and the publishing of printed and online directories, through Quebecor MediaPages™ .
DEFINITIONS
Operating income
In its analysis of operating results, the Corporation defines operating income, as reconciled to net income under IFRS, as net income before amortization, financial expenses, gain (loss) on valuation and translation of financial instruments, charge for restructuring of operations, impairment of assets and other special items, impairment of goodwill and intangible assets, gain (loss) on debt refinancing, and income taxes. Operating income as defined above is not a measure of results that is consistent with IFRS. It is not intended to be regarded as an alternative to other financial operating performance measures or to the statement of cash flows as a measure of liquidity. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Corporation uses operating income in order to assess the performance of its investment in Quebecor Media. The Corporation's management and Board of Directors use this measure in evaluating its consolidated results as well as the results of the Corporation's operating segments. This measure eliminates the significant level of depreciation and amortization of tangible and intangible assets and is unaffected by the capital structure or investment activities of the Corporation and its segments. Operating income is also relevant because it is a significant component of the Corporation's annual incentive compensation programs. A limitation of this measure, however, is that it does not reflect the periodic costs of tangible and intangible assets used in generating revenues in the Corporation's segments. The Corporation also uses other measures that do reflect such costs, such as cash flows from segment operations and free cash flows from continuing operating activities. In addition, measures like operating income are commonly used by the investment community to analyze and compare the performance of companies in the industries in which the Corporation is engaged. The Corporation's definition of operating income may not be the same as similarly titled measures reported by other companies.
Table 2 below provides a reconciliation of operating income with net income as disclosed in Quebecor's condensed consolidated financial statements.
Adjusted income from continuing operations
The Corporation defines adjusted income from continuing operations, as reconciled to net income attributable to shareholders under IFRS, as net income attributable to shareholders before gain (loss) on valuation and translation of financial instruments, charge for restructuring of operations, impairment of assets and other special items, impairment of goodwill and intangible assets, and loss (gain) on debt refinancing, net of income tax and net income (loss) attributable to non-controlling interest. Adjusted income from continuing operations, as defined above, is not a measure of results that is consistent with IFRS. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Corporation's definition of adjusted income from continuing operating activities may not be identical to similarly titled measures reported by other companies.
Table 3 provides a reconciliation of adjusted income from continuing operations to the net income attributable to shareholders measure used in Quebecor's condensed consolidated financial statements.
Average Monthly Revenue per User
ARPU is an industry metric that the Corporation uses to measure its monthly cable television, Internet access, cable and mobile telephony revenues per average basic cable customer. ARPU is not a measurement that is consistent with IFRS and the Corporation's definition and calculation of ARPU may not be the same as identically titled measurements reported by other companies. The Corporation calculates ARPU by dividing its combined cable television, Internet access, cable telephony and mobile telephony revenues by the average number of basic customers during the applicable period, and then dividing the resulting amount by the number of months in the applicable period.
Contacts:
Jean-Francois Pruneau
Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
514 380-4144
Martin Tremblay
Vice President, Public Affairs
Quebecor Media Inc.
514 380-1985
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