Quebecor Inc. announces Q2 2016 results

Press Release (PDF)
Consolidated Financial Statements and Notes (PDF)
Management's Discussion and Analysis (PDF)
Supplementary Disclosure - Quebecor Inc. (PDF)

MONTRÉAL, 4 Aug. 2016 /CNW Telbec/ - Quebecor Inc. ("Quebecor" or the "Corporation") today reported consolidated financial results for the second quarter of 2016. Quebecor consolidates the financial results of its Quebecor Media Inc. ("Quebecor Media") subsidiary, in which it holds an 81.1% interest.

Highlights

Second quarter 2016

• Revenues: $992.5 million, up $28.7 million (3.0%).
• Adjusted operating income: $360.3 million, up $11.0 million (3.1%).
• Net income attributable to shareholders: $9.8 million ($0.08 per basic share) in the second quarter of 2016, compared with $72.1 million ($0.59 per basic share) in the same period of 2015, a decrease of $62.3 million ($0.51 per basic share), including the $105.3 million unfavourable impact of losses and gains on embedded derivatives related to convertible debentures.
• Adjusted income from continuing operating activities: $69.9 million ($0.57 per basic share) in the second quarter of 2016, compared with $66.5 million ($0.54 per basic share) in the same period of 2015, an increase of $3.4 million ($0.03 per basic share).
• Telecommunications segment revenues increased by $38.9 million (5.2%) and adjusted operating income by $20.3 million (5.9%) in the second quarter of 2016.
• Videotron Ltd. ("Videotron") significantly increased its revenues from mobile telephony ($26.5 million or 27.5%), Internet access ($16.5 million or 7.3%), business solutions ($10.3 million or 62.0%) and Club illico over‑the top video service ("Club illico") ($2.0 million or 37.0%).
• Videotron's average monthly revenue per user ("ARPU") was up $9.30 (7.0%) from $133.71 in the second quarter of 2015 to $143.01 in the second quarter of 2016.
• Subscriber connections to the mobile telephony service up 33,200 (4.2%) from the previous quarter.

"Quebecor grew its revenues by $28.7 million (3.0%) and its adjusted operating income by $11.0 million (3.1%) in the second quarter of 2016, reflecting a solid performance by the Telecommunications segment," commented Pierre Dion, President and Chief Executive Officer of Quebecor. "Customers continue to respond positively to the depth and quality of Videotron's offerings, as is evident from the increase of 33,200 subscriber connections (4.2%) to its mobile telephony service in the second quarter of 2016. Our wise investment choices in operations with strong growth potential and the repositioning of our asset portfolio over the past few years are paying off, demonstrating our strategy's long-term viability. The 5.1% increase in adjusted income from continuing operating activities is also noteworthy; the factors in that increase included the positive impact of the various financial operations carried out over the past 12 months."

"Once again, Videotron's flagship products helped drive up its results, particularly mobile telephony, Internet access, business solutions and Club illico," said Manon Brouillette, President and Chief Executive Officer of Videotron. "The number of revenue generating units¹ increased by 128,300 (2.3%) during the 12-month period ended June 30, 2016, including an increase of 126,000 subscriber connections (17.9%) to the mobile telephony service. The mobile service's ARPU was $50.51 in the second quarter of 2016, up 7.4% from the same quarter of 2015. Our business solutions segment also continued to make a substantial contribution to our results in the second quarter of 2016, mainly due to the acquisition of Fibrenoire inc. and the business impacts from our major investments in our data centres."

In July 2016, Videotron launched its new Giga Fibre Hybrid Internet access service, which offers residential and business customers download speeds of up to 940 Mbps. "With Giga Fibre Hybrid service, Videotron maintains its pioneering posture. More than 20 years ago, we were among the first to offer high-speed Internet in Québec and we have since been able to differentiate ourselves by rapidly upgrading our services to meet our customers' present and future needs," concluded Manon Brouillette.

"In the Media segment, the advertising revenues and operating income of our TVA Sports specialty channel were unfortunately affected by the Montréal Canadiens' failure to qualify for the National Hockey League playoffs, which was not the case in the second quarter of 2015," noted Julie Tremblay, President and Chief Executive Officer of Quebecor Media Group. Meanwhile, the soundstage and equipment leasing operations of Mels Studios and Post-production G.P. ("MELS") suffered from the absence of any major Hollywood production in the second quarter of 2016, whereas the movie X-Men Apocalypse was filming on MELS' soundstages in the same period of 2015. However, we are pleased with the bookings we have in the coming months. The growth in the magazine publishing segment's operating income resulted from a concerted effort to successfully integrate the magazines acquired from Transcontinental on April 12, 2015.

"We also launched Immersion, a new video advertising format that enables businesses and their brands to leverage existing content and reduce their advertising video production costs. The innovative technology displays full-screen, high‑resolution videos that integrate perfectly into the front end of most websites," concluded Julie Tremblay.

In the Sports and Entertainment segment, in April 2016 Gestev became the official imprint for all shows and events produced and/or presented by Quebecor, enhancing the total package offered by the Corporation. Gestev was the co‑promoter, with Live Nation, of a concert by the British band Mumford & Sons at Baie de Beauport on June 11, 2016. The successful event provided a compelling demonstration of Gestev's exceptional new offerings for fans of music and live events.

"In the first half of 2016, our Corporation continued investing and pursuing its business plan, focused on lines of business with strong growth potential" and, concluded Pierre Dion, "Quebecor remains well positioned to achieve its shareholder value‑maximization objectives."

1 - The sum of subscriptions to the cable television, cable Internet access and Club illico services, plus subscriber connections to the cable and mobile telephony services.

For more details and to consult definitions of "adjusted operating income", "adjusted income from continuing operating activities" and "average monthly revenue per user", please refer to the attached PDF file for the complete version of the press release.

SOURCE Quebecor Inc.

Jean-François Pruneau, Senior Vice President and Chief Financial Officer, Quebecor Inc. and Quebecor Media Inc., [email protected], 514 380-4144; Martin Tremblay, Vice President, Public Affairs, Quebecor Media Inc., [email protected], 514 380-1985