Scotia on Q1
02:46 PM EDT, 05/05/2022 (MT Newswires) -- On the Q1 FY22 conference call, Scotiabank noted Thursday, BCE management stated a couple of key highlights.
On Wireless, revenue increased 5.2% y/y to $2.2bn, driven by strong service revenue growth (up 8.7% y/y to $1.6bn), partly offset by lower y/y product revenue (down 3.8% to $564mln). The stable service revenue growth was a result of increased mobile net subscribers and higher blended mobile ARPU at $57.98 (up 5.3% y/y), along with the roaming revenue recovery as international travel unfolded. BCE noted management attributed 50% of ARPU growth to roaming. The decline in product revenue was due to lower sales transaction volumes, specifically phone upgrades, and subscriber activations. Also, postpaid phone net additions totaled 34K, up ~4% y/y, reflecting an improved churn of 0.79%, down 10 bps y/y.
On Wireline, total revenue dropped 2.2% y/y to $3bn due to lower service and equipment revenue. Wireline service revenue was down 0.8% to $2.9bn, reflecting the ongoing decline in legacy voice, data and satellite TV revenues, as well as lower business service solution revenue as a result of postponed business project spending due to COVID-19 disruption. Although wireline revenue was lower, wireline adjusted EBITDA was $1.3bn, up 0.3%, driven by reduced operating costs and decline in low-margin data equipment sales. As a result, there was a wireline EBITDA margin expansion of 1.2% to 45.4%.
Also, residential internet revenue was up, driven by stable retail internet net adds (26k, up 22.7% y/y). There was an improved retail residential NAS net loss of 42k, reflecting less deactivation impacted by COVID.
On Media, revenue was $825mln, increased 15.7% y/y as a result of higher advertising and subscriber revenue. Advertising revenue was up 8.5% y/y, driven by revenue growth across all advertising platforms as a result of COVID-19 recovery. Subscriber revenue increased 22.1% this quarter, mainly due to a one-time retroactive adjustment of near $70M on a contract with a Canadian TV distributor and continued rise in DTC subscribers. Management clarified that on a normalized basis (without retroactive adjustment), the media revenue growth rate should be around 6%. Also, Media adjusted EBITDA was $208M (up 45.5% y/y) as a result of higher revenue, moderated by higher operating costs (up 8.2% y/y at $617M).
BCE remained firm on its capex of $5bn for F22 and expected it to begin decreasing starting 2023 as it's approaching its goal to provide 5G network service to more than 80% of Canadians by year-end. Bell's overall share of complaints had also declined 13%, reduced for the seventh consecutive year. Currently, BCE stated 91% of TV and Internet customers in fibre footprint are on its fiber network, while the remaining 9% customers are still on copper, which will be migrated as part of the copper decommission plan, likely to happen in 2023 and beyond.
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