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Rogers Communications Ord Shs Class A T.RCI.A

Alternate Symbol(s):  RCI | T.RCI.B | RCIAF

Rogers Communications Inc. is a wireless, cable, and media company. The Company provides connectivity and entertainment to Canadian consumers and businesses across the country. The Company also has a portfolio of media properties, which includes sports media and entertainment, television and radio broadcasting properties, multi-platform televised and online shopping and digital media. Its wireless segment provides wireless telecommunications operations for Canadian consumers and businesses. Its cable segment is engaged in cable telecommunications operations, including Internet, television, and other video, satellite, telephony, and smart home monitoring services for Canadian consumers and businesses, and network connectivity through its fiber network and data center assets to support a range of voice, data, networking, hosting, and cloud-based services. Its media segment offers a diversified portfolio of media properties, including specialty channels, digital media, and others.


TSX:RCI.A - Post by User

Post by Possibleidiot01on Apr 25, 2024 6:32am
133 Views
Post# 36006512

Debt repayment - BNN article

Debt repayment - BNN article

Rogers plans sale of data centres, other real estate as it zeroes in on debt

 
 
 

RCI/A:CT (RCI/A:CT)

55.70 0.35 (0.63%)
 
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Rogers Communications Inc. is listing its data centres for sale in an effort to raise a billion dollars as the company moves to pay off debt related to the Shaw merger, the company said.

“It’s true,” CFO Glenn Brandt told analysts on the company’s first-quarter earnings call on Wednesday. “We are looking at raising a billion dollars in asset sales, predominantly (from) real estate.”

He added the decision to sell the company's enterprise data centres, which focus on third-party sales, will not affect its wireless services as they are managed separately. The company did not confirm how many of its 12 Canadian data centres would be sold.

While Rogers plans to divest some properties this year, Brandt said a slowdown in the real estate market could hamper their plans.

The push to sell real estate assets comes as Rogers reported reaching its target of $1 billion in savings after its takeover of Shaw Communications — 12 months ahead of schedule. Still, the company's chief executive told analysts he's on the hunt for more.

"Having hit the $1 billion of synergy savings doesn't mean we're taking our foot off the gas pedal in terms of continued efficiency improvements," CEO Tony Staffieri told analysts during the earnings call.

This April marks a year since the $26-billion Shaw merger with Rogers. Staffieri said he remains impressed with how the Shaw assets are adding to the company.

There are still some key integration projects that need to be completed alongside taking on opportunities with vendors — all improving efficiency, he told analysts.

He added Rogers is working on revenue synergies as it expands its footprint in the enterprise space with bundle packages, particularly in Western Canada.

The sale of its Cogeco stake and some U.S. bonds helped repay $5 billion of Shaw-related debt and lower its 2024 annual interest costs by about $100 million, he said.

Rogers reported a first-quarter profit of $256 million, or 46 cents per diluted share, down from down from $511 million a year ago or $1 per diluted share.

Jerome Dubreuil of Desjardins said the earnings were "slightly positive."

"We believe that having reached the targeted $1 billion in synergies this early and before the completion of certain initiatives leaves room for additional synergies down the road," said Dubreuil.

The company reported its wireless service revenue went up nine per cent in the first quarter of 2024, compared to the same period last year, mainly due to a higher number of customers from both the Shaw Mobile integration and subscriber growth.

Though the company expects to compete aggressively on price for its lower-cost plans and flanker brands such as Fido, Staffieri said they are growing subscriber revenue at higher price points as well.

Staffieri said a "real catalyst" for that increase has been consumers moving to the Rogers Premium brand, which is switching to its 5G network, with a $50 entry price.

 

The company’s mobile phone average monthly revenue per user was $58.06, up from $57.26 in the first quarter of last year.

Dubreuil said postpaid net adds were higher than what Desjardins anticipated.

“However, we believe the new lower federal immigration targets are not yet reflected in the quarter,” he said in a note to clients.

Despite a proposed slowdown in immigration, Staffieri said the company expects to see growth of four to 4.5 per cent this year. That's down from more than five per cent last year but the CEO said this year's estimates are "extremely strong."

“Growth in the market is a combination of two factors – half of it roughly is from penetration gains and the other half is related to the ‘new to Canada’ category,” he said.

Monthly churn, or customer turnover, was 1.1 per cent during the quarter, significantly higher than last year’s 0.79 per cent. Although, Dubreuil said, it was in line with expectations.

During its annual meeting, Rogers announced a 10-year agreement with Comcast, bringing more variety to its entertainment section and enabling the use of 10G technologies.

The partnership will also see Rogers launch a product designed to maintain an internet connection during local outages. When the power goes out, the rechargeable battery-equipped device automatically transitions to its cellular backup function so connectivity is maintained.

Media revenue at Rogers amounted to $479 million, down from $505 million in the same quarter last year.

Rogers noted the revenue decline came in part because of comparison with the first quarter of 2023, when a one-time benefit boosted the bottom line.

On an adjusted basis, Rogers says it earned 99 cents per diluted share in its latest quarter, down from $1.09 per diluted share in the same quarter last year.

This report by The Canadian Press was first published April 24, 2024.

This is a corrected story. An earlier version referred to the wrong quarter in the headlines.



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