TORONTO — Steady growth in all of its divisions and a concerted effort to cut capital expenses helped Canada’s largest cabler Rogers Communications post C$54.2 million ($38.8 million) in net income and a 10% increase in revenues.
Toronto-based Rogers posted net income for the second quarter ended June 30 of $38.8 million, compared to $135 million in red ink a year ago, on operating revenue to $846.6 million.
The company’s three divisions continue to offer year-over-year growth. Cable revenue was up 10.4% to $307 million, boosted by price and subscriber base increases.
Wireless jumped 13.7% to $391.7 million with an increase in the number of postpaid subscribers and lower churn, and media climbed 2.9% to $157 million. The media division’s growth was primarily attributed to its newly launched Toronto-based multicultural television station, OMNI.2 as well as growth at its sports specialty channel, Sportsnet.
Operating profit for the three divisions climbed a combined 28.4%, with cable up 19%, wireless 37.4% and media up 23.3%.
Capital expenditures declined by 31.5% to $159 million, in keeping with the company’s stated goal to slim down its spending.
The strengthening Canadian dollar added an $83 million foreign exchange accounting gain, primarily on the revaluation of some U.S. debt. Long term debt at the end of the quarter was $4.1 billion, down from $4.3 billion a year ago.
“Excellent quarterly operating profit growth in cable, wireless and media, coupled with a cut in capital spending at all three of the divisions, resulted in a $124.4 million year-over-year improvement in quarterly cash flow,” said prexy and CEO Ted Rogers.
“The continued focus across Rogers on stable operating performance, profitable growth and opportunistic de-leveraging is apparent in these results and is positioning us increasingly well for continued success.”
The company advanced the Toronto Blue Jays Baseball Club $21.5 million in the quarter to finance its cash operating deficiency and posted a $9.8 million equity loss for its 80% position in the club.
The number of Internet subscribers climbed by 26,400 during the quarter, and the number of digital cable households was up 22,300, while basic cablers were down by 14,800, all of which, the company reports, is on par with 2002.
Also during the quarter, RCI adopted a dividend policy of 7¢ per share, to be paid semi-annually, with the first payment on July 2.