Rogers Communications Inc. (TSX: RCI.A and RCI.B; NYSE: RCI) today
announced its unaudited financial and operating results for the
third quarter ended September 30, 2024.
Consolidated Financial
Highlights
(In millions of Canadian dollars, except per share amounts,
unaudited) |
Three months ended September 30 |
|
Nine months ended September 30 |
|
2024 |
|
2023 |
|
% Chg |
|
|
2024 |
|
2023 |
% Chg |
|
|
|
|
|
|
|
|
Total revenue |
|
5,129 |
|
5,092 |
|
1 |
|
|
15,123 |
|
13,973 |
8 |
Total service revenue |
|
4,567 |
|
4,527 |
|
1 |
|
|
13,523 |
|
12,375 |
9 |
Adjusted EBITDA 1 |
|
2,545 |
|
2,411 |
|
6 |
|
|
7,084 |
|
6,252 |
13 |
Net income |
|
526 |
|
(99 |
) |
n/m |
|
|
1,176 |
|
521 |
126 |
Adjusted net income 1 |
|
762 |
|
679 |
|
12 |
|
|
1,925 |
|
1,776 |
8 |
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share |
$0.98 |
$(0.20 |
) |
n/m |
|
$2.19 |
$0.97 |
126 |
Adjusted diluted earnings per share 1 |
$1.42 |
$1.27 |
|
12 |
|
$3.59 |
$3.37 |
7 |
|
|
|
|
|
|
|
|
Cash provided by operating activities |
|
1,893 |
|
1,754 |
|
8 |
|
|
4,545 |
|
3,842 |
18 |
Free cash flow 1 |
|
915 |
|
745 |
|
23 |
|
|
2,167 |
|
1,591 |
36 |
n/m - not meaningful
__________________________
1 Adjusted EBITDA is a total of segments
measure. Free cash flow is a capital management measure. Adjusted
diluted earnings per share is a non-GAAP ratio. Adjusted net income
is a non-GAAP financial measure and is a component of adjusted
diluted earnings per share. See "Non-GAAP and Other Financial
Measures" in our Q3 2024 Management's Discussion and Analysis
(MD&A), available at www.sedarplus.ca, and this earnings
release for more information about each of these measures. These
are not standardized financial measures under International
Financial Reporting Standards (IFRS) and might not be comparable to
similar financial measures disclosed by other companies.
"We continued to build on our momentum and
deliver industry-leading results and attract more Canadians than
any other carrier," said Tony Staffieri, President and CEO. "We
delivered strong market share, record margins in Cable and
Wireless, and we are on track to deliver our full-year targets. I’m
proud of our team for delivering an eleventh straight quarter of
growth and sector-leading performance while strengthening our
balance sheet."
Strategic Highlights
The five objectives set out below guide our work
and decision-making as we further improve our operational execution
and make well-timed investments to grow our core businesses and
deliver increased shareholder value. Below are some highlights for
the quarter.
Build the biggest and best networks in the
country
- Awarded Canada's most reliable 5G
network by umlaut in July 2024.
- Recognized as Canada's fastest and
most reliable Internet by Opensignal in July 2024.
- Delivered 4 Gbps download and 1
Gbps upload speeds with DOCSIS 4.0 modem technology trial.
Deliver easy to use, reliable products and
services
- Launched home Internet and TV
services across Quebec.
- Introduced multi-gigabit speeds to
70% of our Internet footprint.
- Introduced a program to help
newcomers build credit and finance a new smartphone through a
partnership with Nova Credit.
Be the first choice for Canadians
- Attracted 227,000 net combined
mobile phone and Internet customers.
- Signed an agreement with BCE Inc.
(Bell) to become the majority owner of Maple Leaf Sports &
Entertainment (MLSE).
- Launched Bravo in Canada and
announced plans to launch TV channels for HGTV, Food Network,
Magnolia, Discovery ID, and Discovery.
Be a strong national company investing in
Canada
- Invested $977 million in capital
expenditures, further strengthening and growing our networks.
- Announced a partnership with
SenseNet to bring wildfire detection technology to
communities.
- Became the first-ever presenting
sponsor of the 2024 Toronto International Film Festival.
Be the growth leader in our industry
- Grew total service revenue by 1%
and adjusted EBITDA by 6%.
- Reported industry-leading margins
in our Wireless and Cable operations.
- Generated free cash flow of $915
million, up 23%, and cash flow from operating activities of $1,893
million.
MLSE TransactionOn September 18,
2024, we announced an agreement with BCE Inc. (Bell) to acquire
Bell's indirect 37.5% ownership stake in Maple Leaf Sports &
Entertainment Inc. (MLSE) for a purchase price of $4.7 billion
subject to certain adjustments, payable in cash (MLSE Transaction).
We expect to finance a portion of the purchase price with funding
from private investors and we do not expect financing of the MLSE
Transaction will affect our debt leverage ratio outlook. The MLSE
Transaction will also provide Bell the opportunity to renew its
existing MLSE broadcast and sponsorship rights over the long-term
at fair market value. This includes access to content rights for
50% of Toronto Maple Leafs regional games and 50% of Toronto
Raptors games for which MLSE controls the rights. The MLSE
Transaction is subject to certain closing conditions, including
sports league and regulatory approvals. When the MLSE Transaction
closes, we will be the largest owner of MLSE, with a controlling
interest in 75% of MLSE.
MLSE owns the Toronto Maple Leafs (NHL), Toronto
Raptors (NBA), Toronto FC (MLS), the Toronto Argonauts (CFL),
various minor league teams, and associated real estate holdings,
such as Scotiabank Arena. The MLSE Transaction will add to our
existing sports portfolio, including ownership of the Toronto Blue
Jays, Rogers Centre, and Sportsnet.
Quarterly Financial Highlights
RevenueTotal revenue and total
service revenue each increased by 1% this quarter, driven by
revenue growth in our Wireless and Media businesses.
Wireless service revenue increased by 2% this
quarter, primarily as a result of the cumulative impact of growth
in our mobile phone subscriber base over the past year. Wireless
equipment revenue decreased by 1%, primarily as a result of fewer
device upgrades by existing customers.
Cable revenue decreased by 1% this quarter,
improving sequentially, as a result of continued competitive
promotional activity and declines in our Home Phone and Satellite
subscriber bases.
Media revenue increased by 11% this quarter
primarily as a result of higher sports-related revenue.
Adjusted EBITDA and margins
Consolidated adjusted EBITDA increased 6% this quarter, and our
adjusted EBITDA margin increased by 230 basis points, as a result
of full realization of our synergy program associated with the Shaw
Transaction together with ongoing cost efficiencies.
Wireless adjusted EBITDA increased by 5%,
primarily due to the flow-through impact of higher revenue as
discussed above in conjunction with ongoing cost efficiencies. This
gave rise to an adjusted EBITDA margin of 66.1%, up 220 basis
points.
Cable adjusted EBITDA increased by 5% due to the
aforementioned synergy program and ongoing cost efficiencies. This
gave rise to an adjusted EBITDA margin of 57.5%, up 330 basis
points.
Media adjusted EBITDA increased by 25% this
quarter, primarily due to higher revenue as discussed above,
partially offset by higher Toronto Blue Jays expenses, including
game day-related costs.
Net income and adjusted net income
Net income increased by $625 million this quarter to $526 million,
primarily as a result of the $422 million loss recognized last year
related to an obligation to purchase at fair value the
non-controlling interest in one of our joint ventures' investments,
higher adjusted EBITDA, and lower restructuring, acquisition and
other costs, partially offset by higher income tax expense.
Adjusted net income increased by 12% this quarter, primarily as a
result of higher adjusted EBITDA.
Cash flow and available
liquidity This quarter, we generated cash provided by
operating activities of $1,893 million (2023 - $1,754 million) and
free cash flow of $915 million (2023 - $745 million), both of which
increased primarily as a result of higher adjusted EBITDA.
As at September 30, 2024, we had $4.8
billion of available liquidity2 (December 31, 2023 - $5.9
billion), consisting of $0.8 billion in cash and cash equivalents
and $4.0 billion available under our bank and other credit
facilities.
Our debt leverage ratio2 as at September 30,
2024 was 4.6 (December 31, 2023 - 5.0, or 4.7 on an as
adjusted basis to include trailing 12-month adjusted EBITDA of a
combined Rogers and Shaw as if the Shaw Transaction had closed on
January 1, 2023). See "Financial Condition" for more
information.
We also returned $266 million in dividends to
shareholders this quarter and we declared a $0.50 per share
dividend on October 23, 2024.
__________________________
2 Available liquidity and debt leverage
ratio are capital management measures. Pro forma debt leverage
ratio is a non-GAAP ratio. Pro forma trailing 12-month adjusted
EBITDA is a non-GAAP financial measure and is a component of pro
forma debt leverage ratio. See "Non-GAAP and Other Financial
Measures" in our Q3 2024 MD&A for more information about these
measures. These are not standardized financial measures under IFRS
and might not be comparable to similar financial measures disclosed
by other companies. See "Financial Condition" in our Q3 2024
MD&A for a reconciliation of available liquidity.
About this Earnings Release
This earnings release contains important
information about our business and our performance for the three
and nine months ended September 30, 2024, as well as
forward-looking information (see "About Forward-Looking
Information") about future periods. This earnings release should be
read in conjunction with our Third Quarter 2024 Interim Condensed
Consolidated Financial Statements (Third Quarter 2024 Interim
Financial Statements) and notes thereto, which have been prepared
in accordance with International Accounting Standard 34, Interim
Financial Reporting, as issued by the International Accounting
Standards Board (IASB); our Third Quarter 2024 MD&A; our 2023
Annual MD&A; our 2023 Annual Audited Consolidated Financial
Statements and notes thereto, which have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as issued by the IASB; and our other recent filings with Canadian
and US securities regulatory authorities, including our Annual
Information Form, which are available on SEDAR+ at sedarplus.ca or
EDGAR at sec.gov, respectively.
For more information about Rogers, including
product and service offerings, competitive market and industry
trends, our overarching strategy, key performance drivers, and
objectives, see "Understanding Our Business", "Our Strategy, Key
Performance Drivers, and Strategic Highlights", and "Capability to
Deliver Results" in our 2023 Annual MD&A. References in this
earnings release to the Shaw Transaction are to our acquisition of
Shaw Communications Inc. (Shaw) on April 3, 2023. For additional
details regarding the Shaw Transaction, see "Shaw Transaction" in
our 2023 Annual MD&A and our 2023 Annual Audited Consolidated
Financial Statements.
We, us, our, Rogers, Rogers Communications, and
the Company refer to Rogers Communications Inc. and its
subsidiaries. RCI refers to the legal entity Rogers Communications
Inc., not including its subsidiaries. Rogers also holds interests
in various investments and ventures.
All dollar amounts in this earnings release are
in Canadian dollars unless otherwise stated and are unaudited. All
percentage changes are calculated using the rounded numbers as they
appear in the tables. This earnings release is current as at
October 23, 2024 and was approved by the Audit and Risk
Committee of RCI's Board of Directors (the Board) on that date.
In this earnings release, this quarter, the
quarter, or third quarter refer to the three months ended
September 30, 2024, first quarter refers to the three months
ended March 31, 2024, second quarter refers to the three months
ended June 30, 2024, third quarter refers to the three months ended
September 30, 2024 and year to date refers to the nine months ended
September 30, 2024. All results commentary is compared to the
equivalent period in 2023 or as at December 31, 2023, as
applicable, unless otherwise indicated.
Trademarks in this earnings release are owned or
used under licence by Rogers Communications Inc. or an affiliate.
This earnings release may also include trademarks of other parties.
The trademarks referred to in this earnings release may be listed
without the ™ symbols. ©2024 Rogers Communications
Reportable segmentsWe report our
results of operations in three reportable segments. Each segment
and the nature of its business is as follows:
Segment |
Principal activities |
Wireless |
Wireless telecommunications operations for Canadian consumers and
businesses. |
Cable |
Cable telecommunications operations, including Internet, television
and other video (Video), Satellite, telephony (Home Phone), and
home monitoring services for Canadian consumers and businesses, and
network connectivity through our fibre network and data centre
assets to support a range of voice, data, networking, hosting, and
cloud-based services for the business, public sector, and carrier
wholesale markets. |
Media |
A diversified portfolio of media properties, including sports media
and entertainment, television and radio broadcasting, specialty
channels, multi-platform shopping, and digital media. |
Wireless and Cable are operated by our wholly
owned subsidiary, Rogers Communications Canada Inc. (RCCI), and
certain other wholly owned subsidiaries. Media is operated by our
wholly owned subsidiary, Rogers Media Inc., and its
subsidiaries.
Summary of Consolidated Financial
Results
|
|
Three months ended September 30 |
|
Nine months ended September 30 |
|
(In millions of dollars, except margins and per share amounts) |
|
2024 |
|
|
2023 |
|
% Chg |
|
|
2024 |
|
|
2023 |
|
% Chg |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
Wireless |
|
2,620 |
|
|
2,584 |
|
1 |
|
|
|
7,614 |
|
|
7,354 |
|
4 |
|
|
Cable |
|
1,970 |
|
|
1,993 |
|
(1 |
) |
|
|
5,893 |
|
|
5,023 |
|
17 |
|
|
Media |
|
653 |
|
|
586 |
|
11 |
|
|
|
1,868 |
|
|
1,777 |
|
5 |
|
|
Corporate items and intercompany eliminations |
|
(114 |
) |
|
(71 |
) |
61 |
|
|
|
(252 |
) |
|
(181 |
) |
39 |
|
|
Revenue |
|
5,129 |
|
|
5,092 |
|
1 |
|
|
|
15,123 |
|
|
13,973 |
|
8 |
|
|
Total service revenue 1 |
|
4,567 |
|
|
4,527 |
|
1 |
|
|
|
13,523 |
|
|
12,375 |
|
9 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
Wireless |
|
1,365 |
|
|
1,294 |
|
5 |
|
|
|
3,945 |
|
|
3,695 |
|
7 |
|
|
Cable |
|
1,133 |
|
|
1,080 |
|
5 |
|
|
|
3,349 |
|
|
2,663 |
|
26 |
|
|
Media |
|
134 |
|
|
107 |
|
25 |
|
|
|
31 |
|
|
73 |
|
(58 |
) |
|
Corporate items and intercompany eliminations |
|
(87 |
) |
|
(70 |
) |
24 |
|
|
|
(241 |
) |
|
(179 |
) |
35 |
|
|
Adjusted EBITDA |
|
2,545 |
|
|
2,411 |
|
6 |
|
|
|
7,084 |
|
|
6,252 |
|
13 |
|
|
Adjusted EBITDA margin 2 |
|
49.6 |
% |
|
47.3 |
% |
2.3 pts |
|
|
46.8 |
% |
|
44.7 |
% |
2.1 pts |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
526 |
|
|
(99 |
) |
n/m |
|
|
1,176 |
|
|
521 |
|
126 |
|
|
Basic earnings (loss) per share |
$0.99 |
|
$(0.19 |
) |
n/m |
|
$2.21 |
|
$1.00 |
|
121 |
|
|
Diluted earnings (loss) per share |
$0.98 |
|
$(0.20 |
) |
n/m |
|
$2.19 |
|
$0.97 |
|
126 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income 2 |
|
762 |
|
|
679 |
|
12 |
|
|
|
1,925 |
|
|
1,776 |
|
8 |
|
|
Adjusted basic earnings per share 2 |
$1.43 |
|
$1.28 |
|
12 |
|
|
$3.61 |
|
$3.41 |
|
6 |
|
|
Adjusted diluted earnings per share |
$1.42 |
|
$1.27 |
|
12 |
|
|
$3.59 |
|
$3.37 |
|
7 |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
977 |
|
|
1,017 |
|
(4 |
) |
|
|
3,034 |
|
|
2,988 |
|
2 |
|
|
Cash provided by operating activities |
|
1,893 |
|
|
1,754 |
|
8 |
|
|
|
4,545 |
|
|
3,842 |
|
18 |
|
|
Free cash flow |
|
915 |
|
|
745 |
|
23 |
|
|
|
2,167 |
|
|
1,591 |
|
36 |
|
1 |
As defined. See "Key Performance Indicators". |
2 |
Adjusted EBITDA margin is a supplementary financial measure.
Adjusted basic earnings per share is a non-GAAP ratio. Adjusted net
income is a non-GAAP financial measure and is a component of
adjusted basic earnings per share. These are not standardized
financial measures under IFRS and might not be comparable to
similar financial measures disclosed by other companies. See
"Non-GAAP and Other Financial Measures" in our Q3 2024 MD&A for
more information about each of these measures, available at
www.sedarplus.ca. |
Results of our Reportable
Segments
WIRELESS
Wireless Financial Results
|
Three months ended September 30 |
|
Nine months ended September 30 |
(In millions of dollars, except margins) |
2024 |
|
2023 |
|
% Chg |
|
2024 |
|
2023 |
|
% Chg |
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
Service revenue |
2,066 |
|
2,026 |
|
2 |
|
|
6,050 |
|
5,782 |
|
5 |
|
Equipment revenue |
554 |
|
558 |
|
(1 |
) |
|
1,564 |
|
1,572 |
|
(1 |
) |
Revenue |
2,620 |
|
2,584 |
|
1 |
|
|
7,614 |
|
7,354 |
|
4 |
|
|
|
|
|
|
|
|
|
Operating costs |
|
|
|
|
|
|
|
Cost of equipment |
545 |
|
541 |
|
1 |
|
|
1,576 |
|
1,550 |
|
2 |
|
Other operating costs |
710 |
|
749 |
|
(5 |
) |
|
2,093 |
|
2,109 |
|
(1 |
) |
Operating costs |
1,255 |
|
1,290 |
|
(3 |
) |
|
3,669 |
|
3,659 |
|
— |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
1,365 |
|
1,294 |
|
5 |
|
|
3,945 |
|
3,695 |
|
7 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin 1 |
66.1 |
% |
63.9 |
% |
2.2 pts |
|
65.2 |
% |
63.9 |
% |
1.3 pts |
Capital expenditures |
350 |
|
381 |
|
(8 |
) |
|
1,150 |
|
1,291 |
|
(11 |
) |
1 Calculated using service revenue. |
|
Wireless Subscriber Results 1
|
|
Three months ended September 30 |
|
Nine months ended September 30 |
|
(In thousands, except churn and mobile phone ARPU) |
|
2024 |
|
|
2023 |
|
Chg |
|
|
2024 |
|
|
2023 |
|
Chg |
|
|
|
|
|
|
|
|
|
|
Postpaid mobile phone 2 |
|
|
|
|
|
|
|
|
Gross additions |
|
459 |
|
|
556 |
|
|
(97 |
) |
|
|
1,353 |
|
|
1,304 |
|
|
49 |
|
|
Net additions |
|
101 |
|
|
225 |
|
|
(124 |
) |
|
|
311 |
|
|
490 |
|
|
(179 |
) |
|
Total postpaid mobile phone subscribers 3 |
|
10,699 |
|
|
10,332 |
|
|
367 |
|
|
|
10,699 |
|
|
10,332 |
|
|
367 |
|
|
Churn (monthly) |
|
1.12 |
% |
|
1.08 |
% |
0.04 pts |
|
|
1.10 |
% |
|
0.92 |
% |
0.18 pts |
|
Prepaid mobile phone 4 |
|
|
|
|
|
|
|
|
Gross additions |
|
185 |
|
|
263 |
|
|
(78 |
) |
|
|
417 |
|
|
711 |
|
|
(294 |
) |
|
Net additions |
|
93 |
|
|
36 |
|
|
57 |
|
|
|
106 |
|
|
23 |
|
|
83 |
|
|
Total prepaid mobile phone subscribers 3 |
|
1,161 |
|
|
1,278 |
|
|
(117 |
) |
|
|
1,161 |
|
|
1,278 |
|
|
(117 |
) |
|
Churn (monthly) |
|
2.80 |
% |
|
6.00 |
% |
(3.20 pts) |
|
|
3.29 |
% |
|
6.10 |
% |
(2.81 pts) |
|
Mobile phone ARPU (monthly) 5 |
$58.57 |
|
$58.83 |
|
$(0.26 |
) |
|
$57.95 |
|
$57.76 |
|
$0.19 |
|
1 |
Subscriber counts and subscriber churn are key performance
indicators. See "Key Performance Indicators". |
2 |
Effective January 1, 2024, and on a prospective basis, we adjusted
our postpaid mobile phone subscriber base to remove 110,000
Cityfone subscribers as we stopped selling new plans for this
service as of that date. Given this, we believe this adjustment
more meaningfully reflects the underlying organic subscriber
performance of our postpaid mobile phone business. |
3 |
As at end of period. |
4 |
Effective January 1, 2024, and on a prospective basis, we adjusted
our prepaid mobile phone subscriber base to remove 56,000 Fido
prepaid subscribers as we stopped selling new plans for this
service as of that date. Given this, we believe this adjustment
more meaningfully reflects the underlying organic subscriber
performance of our prepaid mobile phone business. |
5 |
Mobile phone ARPU is a supplementary financial measure. See
"Non-GAAP and Other Financial Measures" in our Q3 2024 MD&A for
more information about this measure, available at
www.sedarplus.ca. |
|
|
Service revenueThe 2% increase
in service revenue this quarter and 5% increase year to date were
primarily a result of the cumulative impact of growth in our mobile
phone subscriber base over the past year, including our evolving
mobile phone plans that increasingly bundle more services in the
monthly service fee. The year to date increase was also affected by
the impact of the Shaw Mobile subscribers acquired through the Shaw
Transaction in April 2023.
Mobile phone ARPU remained stable this quarter
and year to date.
The continued robust postpaid gross additions this
quarter and year to date were a result of sales execution in a
growing Canadian market. The decrease in gross additions this
quarter was a result of a less active market and our focus on
attracting subscribers to our premium 5G Rogers brand.
Equipment revenueThe 1% decreases
in equipment revenue this quarter and year to date were primarily a
result of:
- fewer device upgrades by existing
customers; partially offset by
- an increase in new subscribers
purchasing devices; and
- a continued shift in the product
mix towards higher-value devices.
Operating costs Cost of equipment
The 1% increase in the cost of equipment this quarter and 2%
increase year to date were a result of the equipment revenue
changes discussed above.
Other operating costs The 5% decrease in other
operating costs this quarter and 1% decrease year to date were
primarily a result of:
- lower costs associated with
productivity and efficiency initiatives; partially offset by
- higher costs associated with our
expanded network.
Adjusted EBITDA
The 5% increase in adjusted EBITDA this quarter and 7% increase
year to date were a result of the revenue and expense changes
discussed above.
CABLE
Cable Financial Results
|
Three months ended September 30 |
|
Nine months ended September 30 |
(In millions of dollars, except margins) |
2024 |
|
2023 |
|
% Chg |
|
2024 |
|
2023 |
|
% Chg |
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
Service revenue |
1,962 |
|
1,986 |
|
(1 |
) |
|
5,857 |
|
4,997 |
|
17 |
Equipment revenue |
8 |
|
7 |
|
14 |
|
|
36 |
|
26 |
|
38 |
Revenue |
1,970 |
|
1,993 |
|
(1 |
) |
|
5,893 |
|
5,023 |
|
17 |
|
|
|
|
|
|
|
|
Operating costs |
837 |
|
913 |
|
(8 |
) |
|
2,544 |
|
2,360 |
|
8 |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
1,133 |
|
1,080 |
|
5 |
|
|
3,349 |
|
2,663 |
|
26 |
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
57.5 |
% |
54.2 |
% |
3.3 pts |
|
56.8 |
% |
53.0 |
% |
3.8 pts |
Capital expenditures |
511 |
|
560 |
|
(9 |
) |
|
1,500 |
|
1,417 |
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Subscriber Results 1
|
|
Three months ended September 30 |
|
Nine months ended September 30 |
|
(In thousands, except ARPA and penetration) |
|
2024 |
|
|
2023 |
|
Chg |
|
|
2024 |
|
|
2023 |
|
Chg |
|
|
|
|
|
|
|
|
|
|
Homes passed2 |
|
10,145 |
|
|
9,869 |
|
|
276 |
|
|
|
10,145 |
|
|
9,869 |
|
|
276 |
|
|
Customer relationships |
|
|
|
|
|
|
|
|
Net additions (losses) |
|
13 |
|
|
(7 |
) |
|
20 |
|
|
|
33 |
|
|
(1 |
) |
|
34 |
|
|
Total customer relationships2 |
|
4,669 |
|
|
4,780 |
|
|
(111 |
) |
|
|
4,669 |
|
|
4,780 |
|
|
(111 |
) |
|
ARPA (monthly)3 |
$140.36 |
|
$138.46 |
|
$1.90 |
|
|
$140.05 |
|
$142.20 |
|
$(2.15 |
) |
|
|
|
|
|
|
|
|
|
|
Penetration2 |
|
46.0 |
% |
|
48.4 |
% |
(2.4 pts) |
|
|
46.0 |
% |
|
48.4 |
% |
(2.4 pts) |
|
|
|
|
|
|
|
|
|
|
Retail Internet |
|
|
|
|
|
|
|
|
Net additions |
|
33 |
|
|
18 |
|
|
15 |
|
|
|
85 |
|
|
57 |
|
|
28 |
|
|
Total retail Internet subscribers2 |
|
4,247 |
|
|
4,302 |
|
|
(55 |
) |
|
|
4,247 |
|
|
4,302 |
|
|
(55 |
) |
|
Video |
|
|
|
|
|
|
|
|
Net (losses) additions |
|
(39 |
) |
|
23 |
|
|
(62 |
) |
|
|
(99 |
) |
|
27 |
|
|
(126 |
) |
|
Total Video subscribers2 |
|
2,652 |
|
|
2,755 |
|
|
(103 |
) |
|
|
2,652 |
|
|
2,755 |
|
|
(103 |
) |
|
Home Monitoring |
|
|
|
|
|
|
|
|
Net additions (losses) |
|
19 |
|
|
(2 |
) |
|
21 |
|
|
|
31 |
|
|
(11 |
) |
|
42 |
|
|
Total Home Monitoring subscribers2 |
|
120 |
|
|
90 |
|
|
30 |
|
|
|
120 |
|
|
90 |
|
|
30 |
|
|
Home Phone |
|
|
|
|
|
|
|
|
Net losses |
|
(29 |
) |
|
(36 |
) |
|
7 |
|
|
|
(95 |
) |
|
(78 |
) |
|
(17 |
) |
|
Total Home Phone subscribers2 |
|
1,534 |
|
|
1,648 |
|
|
(114 |
) |
|
|
1,534 |
|
|
1,648 |
|
|
(114 |
) |
1 |
Subscriber results are key performance indicators. See "Key
Performance Indicators". |
2 |
As at end of period. |
3 |
ARPA is a supplementary financial measure. See "Non-GAAP and Other
Financial Measures" in our Q3 2024 MD&A for more information
about this measure, available at www.sedarplus.ca. |
|
|
Service revenue The 1% decrease in
service revenue this quarter was a result of:
- continued competitive promotional
activity; and
- declines in our Home Phone, Video,
and Satellite subscriber bases.
The 17% increase in service revenue year to date
was primarily a result of the completion of the Shaw Transaction in
April 2023, which contributed an incremental approximately $1
billion in the first quarter, partially offset by the factors
discussed above.
The lower ARPA this year was primarily a result
of competitive promotional activity.
Operating costsThe 8% decrease
in operating costs this quarter was a result of the full
realization of our synergy targets associated with the Shaw
Transaction and ongoing cost efficiency initiatives. The 8%
increase year to date reflects a full nine months of results for
the Shaw Transaction, which closed in April 2023.
Adjusted EBITDAThe 5% increase
in adjusted EBITDA this quarter and 26% increase year to date were
a result of the service revenue and expense changes discussed
above.
MEDIA
Media Financial Results
|
Three months ended September 30 |
|
Nine months ended September 30 |
(In millions of dollars, except margins) |
2024 |
|
2023 |
|
% Chg |
|
2024 |
|
2023 |
|
% Chg |
|
|
|
|
|
|
|
|
Revenue |
653 |
|
586 |
|
11 |
|
1,868 |
|
1,777 |
|
5 |
|
Operating costs |
519 |
|
479 |
|
8 |
|
1,837 |
|
1,704 |
|
8 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
134 |
|
107 |
|
25 |
|
31 |
|
73 |
|
(58 |
) |
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
20.5 |
% |
18.3 |
% |
2.2 pts |
|
1.7 |
% |
4.1 |
% |
(2.4 pts) |
Capital expenditures |
37 |
|
33 |
|
12 |
|
205 |
|
137 |
|
50 |
|
Revenue The 11% increase in
revenue this quarter and 5% increase year to date were a result
of:
- higher sports-related revenue,
driven by higher subscriber revenue and higher revenue at the
Toronto Blue Jays; partially offset by
- lower Today's Shopping Choice
revenue.
Operating costs The 8%
increases in operating costs this quarter and year to date were a
result of:
- higher Toronto Blue Jays expenses,
including game day-related costs; partially offset by
- lower Today's Shopping Choice costs
in line with lower revenue.
Adjusted EBITDAThe increase in
adjusted EBITDA this quarter and decrease year to date were a
result of the revenue and expense changes discussed above.
CAPITAL EXPENDITURES
|
|
Three months ended September 30 |
|
Nine months ended September 30 |
|
(In millions of dollars, except capital intensity) |
2024 |
|
2023 |
|
% Chg |
|
2024 |
|
2023 |
|
% Chg |
|
|
|
|
|
|
|
|
|
|
Wireless |
350 |
|
381 |
|
(8 |
) |
|
1,150 |
|
1,291 |
|
(11 |
) |
|
Cable |
511 |
|
560 |
|
(9 |
) |
|
1,500 |
|
1,417 |
|
6 |
|
|
Media |
37 |
|
33 |
|
12 |
|
|
205 |
|
137 |
|
50 |
|
|
Corporate |
79 |
|
43 |
|
84 |
|
|
179 |
|
143 |
|
25 |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures 1 |
977 |
|
1,017 |
|
(4 |
) |
|
3,034 |
|
2,988 |
|
2 |
|
|
|
|
|
|
|
|
|
|
|
Capital intensity 2 |
19.0 |
% |
20.0 |
% |
(1.0 pts) |
|
20.1 |
% |
21.4 |
% |
(1.3 pts) |
1 |
Includes additions to property, plant and equipment net of proceeds
on disposition, but does not include expenditures for spectrum
licences, additions to right-of-use assets, or assets acquired
through business combinations. |
2 |
Capital intensity is a supplementary financial measure. See
"Non-GAAP and Other Financial Measures" in our Q3 2024 MD&A for
more information about this measure, available at
www.sedarplus.ca. |
One of our objectives is to build the biggest
and best networks in the country. As we continually work towards
this, we once again plan to spend more on our wireless and wireline
networks this year than we have in the past several years. We
continue to expand the reach and capacity of our 5G network (the
largest 5G network in Canada as at September 30, 2024) across the
country. We also continue to invest in fibre deployments, including
fibre-to-the-home (FTTH), in our cable network and we are expanding
our network footprint to reach more homes and businesses, including
in rural, remote, and Indigenous communities.
These investments will strengthen network
resilience and stability and will help us bridge the digital divide
by expanding our network further into rural and underserved areas
through participation in various programs and projects.
Wireless The decreases in capital
expenditures in Wireless this quarter and year to date were due to
the timing of investments. We continue to make investments in our
network development and 5G deployment to expand our wireless
network. The ongoing deployment of 3500 MHz spectrum and the
commencement of 3800 MHz spectrum deployment continue to augment
the capacity and resilience of our earlier 5G deployments in the
600 MHz spectrum band.
Cable The decrease in capital
expenditures in Cable this quarter was due to the timing of
investments. The increase year to date reflects a full nine months
of results for the Shaw Transaction. Capital expenditures reflect
continued investments in our infrastructure, including additional
fibre deployments to increase our FTTH distribution. These
investments incorporate the latest technologies to help deliver
more bandwidth and an enhanced customer experience as we progress
in our connected home roadmap, including service footprint
expansion and upgrades to our DOCSIS 3.1 platform to evolve to
DOCSIS 4.0, offering increased network resilience, stability, and
faster download speeds over time.
Media The year to date increase in
Media capital expenditures was a result of higher Toronto Blue Jays
stadium infrastructure-related expenditures associated with the
second phase of the Rogers Centre modernization project.
Capital intensityCapital intensity
decreased this quarter and year to date as a result of the revenue
and capital expenditure changes discussed above.
Review of Consolidated
Performance
This section discusses our consolidated net
income and other income and expenses that do not form part of the
segment discussions above.
|
Three months ended September 30 |
|
Nine months ended September 30 |
(In millions of dollars) |
2024 |
2023 |
|
% Chg |
|
2024 |
2023 |
% Chg |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
2,545 |
2,411 |
|
6 |
|
|
7,084 |
6,252 |
13 |
|
Deduct (add): |
|
|
|
|
|
|
|
Depreciation and amortization |
1,157 |
1,160 |
|
— |
|
|
3,442 |
2,949 |
17 |
|
Restructuring, acquisition and other |
91 |
213 |
|
(57 |
) |
|
323 |
599 |
(46 |
) |
Finance costs |
568 |
600 |
|
(5 |
) |
|
1,724 |
1,479 |
17 |
|
Other expense |
2 |
426 |
|
(100 |
) |
|
5 |
381 |
(99 |
) |
Income tax expense |
201 |
111 |
|
81 |
|
|
414 |
323 |
28 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
526 |
(99 |
) |
n/m |
|
1,176 |
521 |
126 |
|
Depreciation and amortization
|
Three months ended September 30 |
|
Nine months ended September 30 |
(In millions of dollars) |
2024 |
2023 |
% Chg |
|
2024 |
2023 |
% Chg |
|
|
|
|
|
|
|
|
Depreciation of property, plant and equipment |
923 |
925 |
— |
|
|
2,731 |
2,393 |
14 |
Depreciation of right-of-use assets |
97 |
92 |
5 |
|
|
304 |
264 |
15 |
Amortization |
137 |
143 |
(4 |
) |
|
407 |
292 |
39 |
|
|
|
|
|
|
|
|
Total depreciation and amortization |
1,157 |
1,160 |
— |
|
|
3,442 |
2,949 |
17 |
The year to date increase in depreciation and
amortization was primarily a result of the assets acquired through
the Shaw Transaction.
Restructuring, acquisition and
other
|
Three months ended September 30 |
|
Nine months ended September 30 |
(In millions of dollars) |
2024 |
2023 |
|
2024 |
2023 |
|
|
|
|
|
|
Restructuring and other |
54 |
175 |
|
232 |
340 |
Shaw Transaction-related costs |
37 |
38 |
|
91 |
259 |
|
|
|
|
|
|
Total restructuring, acquisition and other |
91 |
213 |
|
323 |
599 |
The Shaw Transaction-related costs in 2023 and
2024 consisted of incremental costs supporting acquisition (in
2023) and integration activities (in 2023 and 2024) related to the
Shaw Transaction. In the first half of 2023, these costs primarily
reflected closing-related fees, the Shaw Transaction-related
employee retention program, and the cost of the tangible benefits
package related to the broadcasting portion of the Shaw
Transaction.
The restructuring and other costs in 2023 and
2024 were primarily severance and other departure-related costs
associated with the targeted restructuring of our employee base,
which also included costs associated with voluntary departure
programs. These costs also included costs related to real estate
rationalization programs and transaction costs related to other
completed and potential acquisitions.
Finance costs
|
Three months ended September 30 |
|
Nine months ended September 30 |
(In millions of dollars) |
2024 |
|
2023 |
|
% Chg |
|
2024 |
|
2023 |
|
% Chg |
|
|
|
|
|
|
|
|
Total interest on borrowings 1 |
505 |
|
535 |
|
(6 |
) |
|
1,525 |
|
1,450 |
|
5 |
|
Interest earned on restricted cash and cash equivalents |
— |
|
— |
|
— |
|
|
— |
|
(149 |
) |
(100 |
) |
|
|
|
|
|
|
|
|
Interest on borrowings, net |
505 |
|
535 |
|
(6 |
) |
|
1,525 |
|
1,301 |
|
17 |
|
Interest on lease liabilities |
34 |
|
30 |
|
13 |
|
|
103 |
|
80 |
|
29 |
|
Interest on post-employment benefits |
(1 |
) |
(3 |
) |
(67 |
) |
|
(3 |
) |
(10 |
) |
(70 |
) |
(Gain) loss on foreign exchange |
(32 |
) |
143 |
|
n/m |
|
107 |
|
16 |
|
n/m |
Change in fair value of derivative instruments |
28 |
|
(136 |
) |
n/m |
|
(94 |
) |
(3 |
) |
n/m |
Capitalized interest |
(8 |
) |
(11 |
) |
(27 |
) |
|
(30 |
) |
(28 |
) |
7 |
|
Deferred transaction costs and other |
42 |
|
42 |
|
— |
|
|
116 |
|
123 |
|
(6 |
) |
|
|
|
|
|
|
|
|
Total finance costs |
568 |
|
600 |
|
(5 |
) |
|
1,724 |
|
1,479 |
|
17 |
|
1 Interest on borrowings includes interest on short-term
borrowings and on long-term debt. |
Interest on borrowings, netThe 17% increase in
net interest on borrowings year to date was primarily a result
of:
- a reduction in interest earned on
restricted cash and cash equivalents, as we used these funds to
partially fund the Shaw Transaction on April 3, 2023; and
- interest expense associated with
the long-term debt assumed through the Shaw Transaction; partially
offset by
- the repayment at maturity of senior
notes in March 2023, October 2023, November 2023, January 2024, and
March 2024 at different underlying interest rates; and
- lower interest expense associated
with refinancing a significant portion of the borrowings under our
term loan facility with senior notes issued in September 2023 and
February 2024.
Other expense (income)The
decreases in other expense this quarter and year to date were a
result of a $422 million loss related to the change in the value of
an obligation to purchase at fair value the non-controlling
interest in one of our joint ventures' investments recorded in the
prior year.
Income tax expense
|
Three months ended September 30 |
|
Nine months ended September 30 |
(In millions of dollars, except tax rates) |
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Statutory income tax rate |
26.2 |
% |
26.2 |
% |
|
26.2 |
% |
26.2 |
% |
Income before income tax expense |
727 |
|
12 |
|
|
1,590 |
|
844 |
|
Computed income tax expense |
190 |
|
3 |
|
|
417 |
|
221 |
|
Increase (decrease) in income tax expense resulting from: |
|
|
|
|
|
Non-deductible (taxable) stock-based compensation |
4 |
|
(5 |
) |
|
(6 |
) |
(2 |
) |
Non-(taxable) deductible portion of equity (income) losses |
— |
|
2 |
|
|
1 |
|
(2 |
) |
Non-taxable income from security investments |
— |
|
(4 |
) |
|
— |
|
(10 |
) |
Non-deductible loss on joint venture's non-controlling interest
purchase obligation |
— |
|
111 |
|
|
— |
|
111 |
|
Other items |
7 |
|
4 |
|
|
2 |
|
5 |
|
|
|
|
|
|
|
Total income tax expense |
201 |
|
111 |
|
|
414 |
|
323 |
|
|
|
|
|
|
|
Effective income tax rate |
27.6 |
% |
n/m |
|
|
26.0 |
% |
38.3 |
% |
Cash income taxes paid |
156 |
|
125 |
|
|
388 |
|
400 |
|
Cash income taxes paid increased this quarter
and decreased year to date due to the timing of installment
payments.
Net income (loss)
|
Three months ended September 30 |
|
Nine months ended September 30 |
(In millions of dollars, except per share amounts) |
|
2024 |
|
2023 |
|
% Chg |
|
|
2024 |
|
2023 |
% Chg |
|
|
|
|
|
|
|
|
Net income (loss) |
|
526 |
|
(99 |
) |
n/m |
|
|
1,176 |
|
521 |
126 |
Basic earnings (loss) per share |
$0.99 |
$(0.19 |
) |
n/m |
|
$2.21 |
$1.00 |
121 |
Diluted earnings (loss) per share |
$0.98 |
$(0.20 |
) |
n/m |
|
$2.19 |
$0.97 |
126 |
Adjusted net incomeWe calculate
adjusted net income from adjusted EBITDA as follows:
|
|
Three months ended September 30 |
|
Nine months ended September 30 |
|
(In millions of dollars, except per share amounts) |
|
2024 |
|
2023 |
% Chg |
|
|
2024 |
|
2023 |
|
% Chg |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
2,545 |
|
2,411 |
6 |
|
|
|
7,084 |
|
6,252 |
|
13 |
|
Deduct: |
|
|
|
|
|
|
|
|
Depreciation and amortization 1 |
|
930 |
|
897 |
4 |
|
|
|
2,753 |
|
2,434 |
|
13 |
|
Finance costs |
|
568 |
|
600 |
(5 |
) |
|
|
1,724 |
|
1,479 |
|
17 |
|
Other expense (income) 2 |
|
2 |
|
4 |
(50 |
) |
|
|
5 |
|
(41 |
) |
n/m |
|
Income tax expense 3 |
|
283 |
|
231 |
23 |
|
|
|
677 |
|
604 |
|
12 |
|
|
|
|
|
|
|
|
|
|
Adjusted net income 1 |
|
762 |
|
679 |
12 |
|
|
|
1,925 |
|
1,776 |
|
8 |
|
|
|
|
|
|
|
|
|
|
Adjusted basic earnings per share |
$1.43 |
$1.28 |
12 |
|
|
$3.61 |
$3.41 |
|
6 |
|
Adjusted diluted earnings per share |
$1.42 |
$1.27 |
12 |
|
|
$3.59 |
$3.37 |
|
7 |
1 |
Our calculation of adjusted net income excludes depreciation and
amortization on the fair value increment recognized on acquisition
of Shaw Transaction-related property, plant and equipment and
intangible assets. For purposes of calculating adjusted net income,
we believe the magnitude of this depreciation and amortization,
which was significantly affected by the size of the Shaw
Transaction, may have no correlation to our current and ongoing
operating results and affects comparability between certain
periods. Depreciation and amortization excludes depreciation and
amortization on Shaw Transaction-related property, plant and
equipment and intangible assets for the three and nine months ended
September 30, 2024 of $227 million and $689 million (2023 -
$263 million and $515 million). Adjusted net income includes
depreciation and amortization on the acquired Shaw property, plant
and equipment and intangible assets based on Shaw's historical cost
and depreciation policies. |
2 |
Other expense (income) for the three and nine months ended
September 30, 2023 excludes a $422 million loss related to an
obligation to purchase at fair value the non-controlling interest
in one of our joint ventures' investments. |
3 |
Income tax expense excludes recoveries of $82 million and $263
million (2023 - recoveries of $120 million and $281 million) for
the three and nine months ended September 30, 2024 related to
the income tax impact for adjusted items. |
Key Performance Indicators
We measure the success of our strategy using a
number of key performance indicators that are defined and discussed
in our 2023 Annual MD&A and this earnings release. We believe
these key performance indicators allow us to appropriately measure
our performance against our operating strategy and against the
results of our peers and competitors. The following key performance
indicators, some of which are supplementary financial measures (see
"Non-GAAP and Other Financial Measures"), are not measurements in
accordance with IFRS. They include:
• subscriber counts; |
• Cable average revenue per account (ARPA); |
|
•
Wireless; |
• Cable
customer relationships; |
|
• Cable; and |
• Cable market penetration (penetration); |
|
• homes passed (Cable); |
• capital intensity; and |
• Wireless subscriber churn (churn); |
• total service revenue. |
• Wireless mobile phone average revenue per
user (ARPU); |
|
|
|
Non-GAAP and Other Financial
Measures
Reconciliation of adjusted
EBITDA
|
Three months ended September 30 |
|
Nine months ended September 30 |
(In millions of dollars) |
2024 |
2023 |
|
|
2024 |
2023 |
|
|
|
|
|
|
Net income (loss) |
526 |
(99 |
) |
|
1,176 |
521 |
Add: |
|
|
|
|
|
Income tax expense |
201 |
111 |
|
|
414 |
323 |
Finance costs |
568 |
600 |
|
|
1,724 |
1,479 |
Depreciation and amortization |
1,157 |
1,160 |
|
|
3,442 |
2,949 |
EBITDA |
2,452 |
1,772 |
|
|
6,756 |
5,272 |
Add (deduct): |
|
|
|
|
|
Other expense |
2 |
426 |
|
|
5 |
381 |
Restructuring, acquisition and other |
91 |
213 |
|
|
323 |
599 |
|
|
|
|
|
|
Adjusted EBITDA |
2,545 |
2,411 |
|
|
7,084 |
6,252 |
Reconciliation of pro forma trailing
12-month adjusted EBITDA
|
As at December 31 |
(In millions of dollars) |
2023 |
|
|
Trailing 12-month adjusted EBITDA - 12 months ended December 31,
2023 |
8,581 |
Add (deduct): |
|
Acquired Shaw business adjusted EBITDA - January 2023 to March
2023 |
514 |
|
|
Pro forma trailing 12-month adjusted EBITDA |
9,095 |
Reconciliation of adjusted net
income
|
Three months ended September 30 |
|
Nine months ended September 30 |
(In millions of dollars) |
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Net income (loss) |
526 |
|
(99 |
) |
|
1,176 |
|
521 |
|
Add (deduct): |
|
|
|
|
|
Restructuring, acquisition and other |
91 |
|
213 |
|
|
323 |
|
599 |
|
Depreciation and amortization on fair value increment of Shaw
Transaction-related assets |
227 |
|
263 |
|
|
689 |
|
515 |
|
Loss on non-controlling interest purchase obligation |
— |
|
422 |
|
|
— |
|
422 |
|
Income tax impact of above items |
(82 |
) |
(120 |
) |
|
(263 |
) |
(281 |
) |
|
|
|
|
|
|
Adjusted net income |
762 |
|
679 |
|
|
1,925 |
|
1,776 |
|
Reconciliation of free cash
flow
|
Three months ended September 30 |
|
Nine months ended September 30 |
(In millions of dollars) |
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
Cash provided by operating activities |
1,893 |
|
1,754 |
|
|
4,545 |
|
3,842 |
|
Add (deduct): |
|
|
|
|
|
Capital expenditures |
(977 |
) |
(1,017 |
) |
|
(3,034 |
) |
(2,988 |
) |
Interest on borrowings, net and capitalized interest |
(497 |
) |
(524 |
) |
|
(1,495 |
) |
(1,273 |
) |
Interest paid, net |
593 |
|
512 |
|
|
1,622 |
|
1,324 |
|
Restructuring, acquisition and other |
91 |
|
213 |
|
|
323 |
|
599 |
|
Program rights amortization |
(13 |
) |
(14 |
) |
|
(52 |
) |
(58 |
) |
Change in net operating assets and liabilities |
(200 |
) |
(185 |
) |
|
209 |
|
258 |
|
Other adjustments 1 |
25 |
|
6 |
|
|
49 |
|
(113 |
) |
|
|
|
|
|
|
Free cash flow |
915 |
|
745 |
|
|
2,167 |
|
1,591 |
|
1 Consists of post-employment benefit contributions, net
of expense, cash flows relating to other operating activities, and
other investment income from our financial
statements. |
Rogers Communications
Inc.Interim Condensed Consolidated Statements of
Income(In millions of Canadian dollars, except per share
amounts, unaudited)
|
Three months ended September 30 |
|
Nine months ended September 30 |
|
|
2024 |
|
2023 |
|
|
|
2024 |
|
2023 |
|
|
|
|
|
Revenue |
|
5,129 |
|
5,092 |
|
|
|
15,123 |
|
13,973 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Operating costs |
|
2,584 |
|
2,681 |
|
|
|
8,039 |
|
7,721 |
Depreciation and amortization |
|
1,157 |
|
1,160 |
|
|
|
3,442 |
|
2,949 |
Restructuring, acquisition and other |
|
91 |
|
213 |
|
|
|
323 |
|
599 |
Finance costs |
|
568 |
|
600 |
|
|
|
1,724 |
|
1,479 |
Other expense |
|
2 |
|
426 |
|
|
|
5 |
|
381 |
|
|
|
|
|
|
Income before income tax expense |
|
727 |
|
12 |
|
|
|
1,590 |
|
844 |
Income tax expense |
|
201 |
|
111 |
|
|
|
414 |
|
323 |
|
|
|
|
|
|
Net income (loss) for the period |
|
526 |
|
(99 |
) |
|
|
1,176 |
|
521 |
|
|
|
|
|
|
Earnings (loss) per share: |
|
|
|
|
|
Basic |
$0.99 |
$(0.19 |
) |
|
$2.21 |
$1.00 |
Diluted |
$0.98 |
$(0.20 |
) |
|
$2.19 |
$0.97 |
Rogers Communications
Inc.Interim Condensed Consolidated Statements of
Financial Position(In millions of Canadian dollars,
unaudited)
|
As atSeptember 30 |
As atDecember 31 |
|
2024 |
2023 |
|
|
|
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
802 |
800 |
Accounts receivable |
4,903 |
4,996 |
Inventories |
472 |
456 |
Current portion of contract assets |
183 |
163 |
Other current assets |
835 |
1,202 |
Current portion of derivative instruments |
77 |
80 |
Assets held for sale |
137 |
137 |
Total current assets |
7,409 |
7,834 |
|
|
|
Property, plant and equipment |
24,812 |
24,332 |
Intangible assets |
17,981 |
17,896 |
Investments |
602 |
598 |
Derivative instruments |
791 |
571 |
Financing receivables |
976 |
1,101 |
Other long-term assets |
910 |
670 |
Goodwill |
16,280 |
16,280 |
|
|
|
Total assets |
69,761 |
69,282 |
|
|
|
Liabilities and shareholders' equity |
|
|
Current liabilities: |
|
|
Short-term borrowings |
2,893 |
1,750 |
Accounts payable and accrued liabilities |
3,721 |
4,221 |
Other current liabilities |
369 |
434 |
Contract liabilities |
690 |
773 |
Current portion of long-term debt |
2,600 |
1,100 |
Current portion of lease liabilities |
566 |
504 |
Total current liabilities |
10,839 |
8,782 |
|
|
|
Provisions |
61 |
54 |
Long-term debt |
37,694 |
39,755 |
Lease liabilities |
2,162 |
2,089 |
Other long-term liabilities |
1,507 |
1,783 |
Deferred tax liabilities |
6,232 |
6,379 |
Total liabilities |
58,495 |
58,842 |
|
|
|
Shareholders' equity |
11,266 |
10,440 |
|
|
|
Total liabilities and shareholders' equity |
69,761 |
69,282 |
Rogers Communications
Inc.Interim Condensed Consolidated Statements of
Cash Flows(In millions of Canadian dollars, unaudited)
|
Three months ended September 30 |
|
Nine months ended September 30 |
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
Operating activities: |
|
|
|
|
|
Net income (loss) for the period |
526 |
|
(99 |
) |
|
1,176 |
|
521 |
|
Adjustments to reconcile net income (loss) to cash provided by
operating activities: |
|
|
|
|
|
Depreciation and amortization |
1,157 |
|
1,160 |
|
|
3,442 |
|
2,949 |
|
Program rights amortization |
13 |
|
14 |
|
|
52 |
|
58 |
|
Finance costs |
568 |
|
600 |
|
|
1,724 |
|
1,479 |
|
Income tax expense |
201 |
|
111 |
|
|
414 |
|
323 |
|
Post-employment benefits contributions, net of expense |
19 |
|
21 |
|
|
54 |
|
25 |
|
Losses from associates and joint ventures |
2 |
|
432 |
|
|
1 |
|
412 |
|
Other |
(44 |
) |
(33 |
) |
|
(99 |
) |
57 |
|
Cash provided by operating activities before changes in net
operating assets and liabilities, income taxes paid, and interest
paid |
2,442 |
|
2,206 |
|
|
6,764 |
|
5,824 |
|
Change in net operating assets and liabilities |
200 |
|
185 |
|
|
(209 |
) |
(258 |
) |
Income taxes paid |
(156 |
) |
(125 |
) |
|
(388 |
) |
(400 |
) |
Interest paid |
(593 |
) |
(512 |
) |
|
(1,622 |
) |
(1,324 |
) |
|
|
|
|
|
|
Cash provided by operating activities |
1,893 |
|
1,754 |
|
|
4,545 |
|
3,842 |
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
Capital expenditures |
(977 |
) |
(1,017 |
) |
|
(3,034 |
) |
(2,988 |
) |
Additions to program rights |
(33 |
) |
(20 |
) |
|
(56 |
) |
(57 |
) |
Changes in non-cash working capital related to capital expenditures
and intangible assets |
(70 |
) |
95 |
|
|
(31 |
) |
66 |
|
Acquisitions and other strategic transactions, net of cash
acquired |
— |
|
— |
|
|
(475 |
) |
(17,001 |
) |
Other |
(1 |
) |
(8 |
) |
|
11 |
|
4 |
|
|
|
|
|
|
|
Cash used in investing activities |
(1,081 |
) |
(950 |
) |
|
(3,585 |
) |
(19,976 |
) |
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
Net (repayment of) proceeds received from short-term
borrowings |
(142 |
) |
(754 |
) |
|
1,119 |
|
(1,343 |
) |
Net issuance (repayment) of long-term debt |
18 |
|
2,389 |
|
|
(1,108 |
) |
7,789 |
|
Net (payments) proceeds on settlement of debt derivatives and
forward contracts |
(25 |
) |
111 |
|
|
(3 |
) |
232 |
|
Transaction costs incurred |
— |
|
(19 |
) |
|
(46 |
) |
(284 |
) |
Principal payments of lease liabilities |
(127 |
) |
(99 |
) |
|
(358 |
) |
(264 |
) |
Dividends paid |
(186 |
) |
(264 |
) |
|
(558 |
) |
(769 |
) |
Other |
1 |
|
— |
|
|
(4 |
) |
— |
|
|
|
|
|
|
|
Cash (used in) provided by financing activities |
(461 |
) |
1,364 |
|
|
(958 |
) |
5,361 |
|
|
|
|
|
|
|
Change in cash and cash equivalents and restricted cash and cash
equivalents |
351 |
|
2,168 |
|
|
2 |
|
(10,773 |
) |
Cash and cash equivalents and restricted cash and cash equivalents,
beginning of period |
451 |
|
359 |
|
|
800 |
|
13,300 |
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
802 |
|
2,527 |
|
|
802 |
|
2,527 |
|
Subsequent Event
Following quarter-end, Rogers entered into a
non-binding term sheet with a leading global financial investor
which will finance a portion of its network with a structured
equity investment of $7 billion. Completion is subject to
finalizing definitive agreements and is expected to close in the
fourth quarter.
About Forward-Looking
Information
This earnings release includes "forward-looking
information" and "forward-looking statements" within the meaning of
applicable securities laws (collectively, "forward-looking
information"), and assumptions about, among other things, our
business, operations, and financial performance and condition
approved by our management on the date of this earnings release.
This forward-looking information and these assumptions include, but
are not limited to, statements about our objectives and strategies
to achieve those objectives, and about our beliefs, plans,
expectations, anticipations, estimates, or intentions.
Forward-looking information
- typically includes words like
could, expect, may, anticipate, assume, believe, intend, estimate,
plan, project, guidance, outlook, target, and similar
expressions;
- includes conclusions, forecasts,
and projections that are based on our current objectives and
strategies and on estimates, expectations, assumptions, and other
factors that we believe to have been reasonable at the time they
were applied but may prove to be incorrect; and
- was approved by our management on
the date of this earnings release.
Our forward-looking information includes
forecasts and projections related to the following items, among
others:
• revenue;• total service revenue;• adjusted
EBITDA; • capital expenditures;• cash income tax
payments;• free cash flow;• dividend payments;• the
growth of new products and services;• expected growth in
subscribers and the services to which they subscribe;• the
cost of acquiring and retaining subscribers and deployment of new
services; |
• continued cost reductions and efficiency improvements;• the
$7 billion structured equity financing transaction (the "network
transaction"), including its expected terms, timing, and
closing; • our debt leverage ratio and the impact the
network transaction will have on that ratio; • the
use of proceeds from the network transaction;• the completion
of the MLSE Transaction; and • all other statements that
are not historical facts. |
|
|
Our conclusions, forecasts, and projections are
based on a number of estimates, expectations, assumptions, and
other factors, including, among others:
• general economic and industry conditions, including the
effects of inflation;• currency exchange rates and interest
rates;• product pricing levels and competitive
intensity;• subscriber growth;• pricing, usage, and churn
rates;• changes in government regulation;• technology and
network deployment; |
• availability of devices;• timing of new product
launches; • content and equipment costs; • the
integration of acquisitions; • industry structure and
stability; and• the assumptions listed under the heading "Key
assumptions underlying our full-year 2024 guidance" in our 2023
Annual MD&A. |
|
|
Except as otherwise indicated, this earnings
release and our forward-looking information do not reflect the
potential impact of any non-recurring or other special items or of
any dispositions, monetizations, mergers, acquisitions, other
business combinations, or other transactions that may be considered
or announced or may occur after the date on which the statement
containing the forward-looking information is made.
Risks and uncertaintiesActual
events and results may differ materially from what is expressed or
implied by forward-looking information as a result of risks,
uncertainties, and other factors, many of which are beyond our
control or our current expectations or knowledge, including, but
not limited to:
• regulatory changes;• technological
changes;• economic, geopolitical, and other conditions
affecting commercial activity;• sports-related work stoppages
or cancellations and labour disputes;• the integration of
acquisitions;• litigation and tax matters;• the level of
competitive intensity;• the emergence of new
opportunities;• external threats, such as epidemics,
pandemics, and other public health crises, natural disasters, the
effects of climate change, or cyberattacks, among
others;• anticipated asset sales may not be achieved within
the expected timeframes or at all for proceeds in the amount or
type expected;• new interpretations and new accounting
standards from accounting standards bodies; |
• unanticipated changes in content or equipment
costs;• changing conditions in the entertainment, information,
and communications industries;• the MLSE Transaction, and any
funding for it from private investors, may not be completed on the
anticipated terms or at all;• we may not reach definitive
agreements for, or may not complete, the network transaction on the
anticipated terms or timing or at all;• we may use proceeds
from the network transaction for different purposes due to
alternative opportunities or requirements, general economic and
market conditions, or other internal or external considerations;
and• the other risks outlined in "Risks and Uncertainties
Affecting our Business" in our 2023 Annual MD&A and "Updates to
Risks and Uncertainties" in our Q3 2024 MD&A. |
|
|
These risks, uncertainties, and other factors
can also affect our objectives, strategies, plans, and intentions.
Should one or more of these risks, uncertainties, or other factors
materialize, our objectives, strategies, plans, or intentions
change, or any other factors or assumptions underlying the
forward-looking information prove incorrect, our actual results and
our plans could vary materially from what we currently foresee.
Accordingly, we warn investors to exercise
caution when considering statements containing forward-looking
information and caution them that it would be unreasonable to rely
on such statements as creating legal rights regarding our future
results or plans. We are under no obligation (and we expressly
disclaim any such obligation) to update or alter any statements
containing forward-looking information or the factors or
assumptions underlying them, whether as a result of new
information, future events, or otherwise, except as required by
law. All of the forward-looking information in this earnings
release is qualified by the cautionary statements herein.
Before making an investment
decisionBefore making any investment decisions and for a
detailed discussion of the risks, uncertainties, and environment
associated with our business, its operations, and its financial
performance and condition, fully review the sections in our 2023
Annual MD&A entitled "Regulation in our Industry" and "Risk
Management", as well as our various other filings with Canadian and
US securities regulators, which can be found at sedarplus.ca and
sec.gov, respectively. Information on or connected to sedarplus.ca,
sec.gov, our website, or any other website referenced in this
document is not part of or incorporated into this earnings
release.
About Rogers
Rogers is Canada's communications and
entertainment company and its shares are publicly traded on the
Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York
Stock Exchange (NYSE: RCI).
Investment Community Contact
Paul
Carpino647.435.6470paul.carpino@rci.rogers.com
Media Contact
Sarah
Schmidt647.643.6397sarah.schmidt@rci.rogers.com
Quarterly Investment Community
Teleconference
Our third quarter 2024 results teleconference
with the investment community will be held on:
- October 24, 2024
- 8:00 a.m. Eastern Time
- webcast available at
investors.rogers.com
- media are welcome to participate on
a listen-only basis
A rebroadcast will be available at
investors.rogers.com for at least two weeks following the
teleconference. Additionally, investors should note that from time
to time, Rogers management presents at brokerage-sponsored investor
conferences. Most often, but not always, these conferences are
webcast by the hosting brokerage firm, and when they are webcast,
links are made available on our website at
investors.rogers.com.
For More Information
You can find more information relating to us on
our website (investors.rogers.com), on SEDAR+ (sedarplus.ca), and
on EDGAR (sec.gov), or you can e-mail us at
investor.relations@rci.rogers.com. Information on or connected to
these and any other websites referenced in this earnings release is
not part of, or incorporated into, this earnings release.
You can also go to investors.rogers.com for
information about our governance practices, environmental, social,
and governance (ESG) reporting, a glossary of communications and
media industry terms, and additional information about our
business.
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