Quebecor had its best trading session of the year on Thursday after unveiling an early year performance that was probably more interesting than expected, in a context of intense competition between large Canadian telecommunications companies.
The stock of Videotron’s parent company closed Thursday’s session up 3.6% at $29.77 on the Toronto Stock Exchange. At one point during the day, the stock was up 6%.
Quebecor’s revenues increased by 22% to 1.36 billion during the first three months of the year, while the consensus of experts was around 1.38 billion. Adjusted earnings per share of 71 cents beat expectations of 67 cents per share.
“The results are apparently better than feared given the high competition in Quebec that was well documented throughout the quarter,” comments analyst Drew McReynolds of RBC.
Videotron lost 6,500 internet subscribers during the quarter. “A first loss of subscribers in almost five years,” underlines Jérôme Dubreuil, at Desjardins, adding that analysts expected a loss of 600 subscribers.
“Videotron lost internet subscribers during the quarter, as expected, but I believe that management chose not to align at all costs with BCE’s promotional offers in Quebec. “It’s the right strategy at this stage of the cycle,” comments analyst Maher Yaghi of Scotia.
The main subsidiary of Quebecor, however, added 60,200 subscribers to its wireless services during the months of January, February and March, which compares favorably to the consensus which was 47,700.
Several analysts pointed out that this was a good performance compared to the 61,000 additions at Rogers, the 45,000 at Telus and the 25,200 at BCE, while Videotron does not operate in all provinces of Canada.
Vince Valentini of TD, for his part, predicted an addition of 68,000 subscribers to Videotron wireless services. “I don’t know why the consensus was so low, but expectations should have been much higher. » He estimates that if Freedom had belonged to Quebecor during the first quarter last year, we would not observe an increase in the number of subscribers in the first quarter this year. This means, according to him, that the very low prices offered by Videotron/Freedom this year did not have the desired effect.
Obstruction
Building on the acquisition of Freedom Mobile, the big boss of Quebecor, Pierre Karl Péladeau, affirmed Thursday during the annual meeting of shareholders that he was ready to deploy all necessary efforts to stimulate the market in order to continue to play the role of fourth player in the country.
However, he once again directly challenged the regulatory authorities. “The constant obstruction of the Big 3 (BCE, Rogers and Telus) to any form of competition must end. The CRTC’s implementation of adequate tools must also continue to allow us to fight on equal terms with the existing oligopoly, regardless of market conditions,” he said.
“In order to continue to offer innovative proposals, at better prices, we need measures better adapted to the current context. »
This is why he said he was disappointed with the arbitration decision rendered last month by the CRTC concerning the rates to be paid for Quebecor to be able to access the Telus wireless network in MVNO (virtual mobile network operator) mode.
“This decision will force us to review our wireless offers as well as the launch of our services in certain Canadian regions considering the excessive operating costs that it will generate. »
He explains that the trend toward increasing data usage makes the bill to pay to the network that could host Videotron – pending the construction of its own network – too high to make it a viable model.
Quebecor therefore says it is obliged to suspend the launch of data-rich plans in Manitoba.
New president of the board
Sylvie Lalande was also introduced Thursday as president of the board of directors following the disappearance of Brian Mulroney on February 29.
“Brian Mulroney is irreplaceable. We all know it. I am therefore not going to replace him, but to succeed him, drawing inspiration from his incomparable presence and his great wisdom,” said the former member of senior management of Videotron, who is a member of the board of directors of Quebecor since 2011 and chair of the board of directors of TVA Group since 2014.
To honor the memory of the former Prime Minister of Canada, the board of directors of Quebecor has decided to appoint Brian Mulroney director emeritus of the company.
André Brosseau becomes vice-president of the Quebecor board of directors, which is now made up of seven members.
reference: www.lapresse.ca