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Rogers Communications is a diversified Canadian communications and media company with its operations in Canada
Rogers boosts Q4 profit by 8%, hikes dividend by 11%
Rogers Communications (TSE:RCI.B) (NYSE:RCI) said Wednesday that fourth quarter net profits rose eight percent as wireless revenue grew two percent on a record number of new smartphone customers and iPhone activations.
The Toronto-based company also boosted its annualized dividend by 11 percent to $1.58 per share for both its voting and non-voting shares, leading to a new quarterly dividend of 39.5 cents per share - payable on April 2.
For the three months that ended December 31, Canada's largest wireless company said net income was $327 million, or 61 cents per diluted share, versus $302 million, or 50 cents per diluted share, a year ago.
Adjusted net income rose to $372 million, or 70 cents per share, up 17 percent from a year earlier.
Total operating revenue edged up one percent for the latest quarter to $3.18 billion.
"During the fourth quarter we sold a record number of new wireless smartphones and increased the number of total cable service unit net additions by 59% versus last year in the face of intense competition, while at the same time we held our expenditures in solid check enabling us to continue to deliver healthy margins," said president and CEO, Nadir Mohamed.
"We not only continued our growth during 2011, but we also met our adjusted operating profit and free cash flow targets which enabled the returning of more than $1.9 billion cash to shareholders through a combination of increased dividends and continued share buybacks, while at the same time further strengthening our already healthy balance sheet."
Wireless revenue rose two percent to $1.83 billion in the quarter, as the company booked 42,000 postpaid, or contract, net subscriber additions, driven by a record number of new smartphone customers and iPhone activations, it said.
Wireless data revenue grew by 19 percent to $600 million as a result of the subscriber additions, helping drive wireless data revenue to now comprise 37 percent of wireless network revenue.
During the quarter, the company activated 791,000 additional smartphones, of which approximately 35 percent were for subscribers new to wireless, compared to 635,000 in the prior year quarter.
This resulted in subscribers with smartphones, who typically generate average monthly revenue per user (ARPU) nearly twice that of voice-only subscribers, representing 56 percent of the overall postpaid subscriber base as at the end of last year, up from 41 percent in the prior year period. Smartphone subscribers also typically churn at lower rates than voice-only customers, Rogers said.
The year-over-year decline in overall subscriber net additions for the quarter, however, reflected an increase in the level of churn, or the rate at which customers leave, associated with heightened competitive intensity, the company said.
Wireless network revenue remained steady at $1.64 billion year-over-year as subscriber growth and increased adoption of wireless data services was offset by a 12 percent decrease in voice ARPU due to greater competition.
Wireless equipment sales rose 26 percent to $185 million.
The wireless unit also saw a five percent decline in adjusted operating profit - a result of higher equipment costs associated with record smartphone sales.
Cable operations revenue rose three percent to $838 million, on a 59 percent increase in total cable service unit net additions. ADjusted operating profit improved eight percent in the unit.
Within the cable unit, RBS and video revenue declined 16 percent and 31 percent, respectively.
Media revenue, on the other hand, rose three percent to $428 million, reflecting a slower ad market, but offset by new initiatives and cost controls, which drove adjusted operating profit growth of 83 percent to $44 million, Rogers said.
In the fourth quarter, Rogers also announced that it, along with Bell Canada, is jointly acquiring a net 75 percent equity interest in Maple Leaf Sports and Entertainment (MLSE) from the Ontario Teachers' Pension Plan. Its net cash commitment, following a planned leveraged recapitalization of MLSE, will total roughly $533 million, representing a 37.5 percent equity interest in MLSE, and will be funded with currently available liquidity, it said.
Wednesday, the company's board also announced the approval of a renewed $1.0 billion share buyback program during the next 12 months.
