Rogers posts cable gains but mobile declines in Q4

Like many service providers, Rogers Communications is still seeking a vaccine against the financial havoc caused by COVID-19.

Rogers reported mixed subscriber and financial results for Q4 2020 as it copes with a second wave of lockdowns across Canada this winter. Its cable division continued to perform relatively well while its wireless unit, the company's biggest, and its media division both suffered notable declines from a year earlier.

As a result, the big Toronto-based cable and mobile provider saw its total revenues drop to C$3.7 billion ($2.9 billion) for the quarter, down 7% from the year-ago total. Likewise, its net income fell to C$449 million ($351 million), down 4% from the same period in 2019.

Rogers, which has now experienced revenue and net income declines for three straight quarters, reported larger falloffs for the entire year. Total revenues for all of 2020 sank 8% to C$13.9 billion ($10.9 billion) while net income plunged 22% to C$1.6 billion ($1.25 billion).

On the company's earnings call with analysts Thursday morning, Rogers executives pinned the blame squarely on the pandemic. CFO Tony Staffieri said COVID-19 cost the carrier C$1.4 billion ($1.09 billion) in revenue and more than C$500 million ($391 million) in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) over the course of 2020.

Despite these revenue and income hits, Rogers officials took some comfort in the fourth quarter results. They noted that they squeezed out greater operating efficiencies and margin improvements and that they achieved some subscriber, revenue and income gains on a sequential basis, if not a year-over-year basis.

"Rogers continued to see sequential improvement in Q4, finishing the year with solid efficiency gains across all of our businesses, a strong balance sheet, solid wireless postpaid net subscribers, and continued momentum in cash flow growth in our cable business," Rogers CEO Joe Natale said in the company's earnings release. The release also stressed that "after experiencing the most significant impact of COVID-19 to date in the second quarter, our results have recovered materially and are growing sequentially, although they are still down compared to last year."

Wireless revenue struggles

As in the prior two quarters, Rogers suffered its most notable blow on the wireless side of the business. Despite netting 114,000 postpaid wireless subscribers in Q4 and cutting its monthly postpaid customer churn rate to 1.19%, the company suffered an 8% decline in wireless revenue, slipping to C$2.3 billion ($1.8 billion) as both service revenues and equipment sales tailed off with the renewed lockdowns. It also lost 40,000 prepaid wireless subs.

Due to these results, Rogers closed the year with nearly 9.7 million postpaid subs and close to 1.3 million prepaid subs, giving it a total of more than 10.9 million wireless customers, the most in Canada.

Cable holds steady

Unlike the wireless unit, Rogers' cable division turned in another steady quarter, with revenues rising 3% on a year-over-year basis to C$1.02 billion ($797 million), as the company netted 19,000 broadband and 71,000 IPTV subscribers. As a result, the operator, which passes close to 4.6 million homes across the nation, ended the year with nearly 2.6 million broadband subs and 544,000 Ignite TV customers,

The MSO also maintained its cable capex intensity margin at 22% as it cut back on set-top box rentals and kept its equipment sell-install rate at an impressive 95% of new and upgraded customers. We'll have more on Rogers' cable and broadband performance in a later story on our sister site, Broadband World News.

Rogers' media division, which took a huge hit in the first half of the year before bouncing back in the third quarter, took another tumble in the fourth quarter because of the pandemic-induced late start to the NBA and NHL seasons. Rogers – which owns MLB's Toronto Blue Jays and their stadium and owns TV rights to the NHL's Toronto Maple Leafs, NBA's Toronto Raptors and the NHL's Canadian national TV package as well as the Jays – reported that its media unit generated C$409 million ($319 million) in revenue in Q4, down 23% from the year-ago period because of lower TV ad and event ticket sales.

In trading on the Toronto Stock Exchange today, Rogers' share price fell nearly 4.80%, to C$58.98 each, reflecting the company's at-best mixed results.

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