Quebecor second-quarter profits rise by $33.9 million, revenues drop

·2 min read

MONTREAL — Freedom Mobile would be much more competitive in the hands of Quebecor than if it had to operate as an independent entity, president and chief executive of Quebecor Pierre Karl Péladeau said Thursday.

In May, the federal Competition Bureau rejected Rogers Communications Inc.'s $26-billion offer to acquire Calgary-based Shaw Communications. Quebecor's $2.85-billion bid to acquire Shaw's Freedom Mobile division, completed in June, did not allay the Bureau's fears during a mediation session in early July. Ultimately, the case could be decided by the Competition Tribunal.

“For us, it is incomprehensible that the Competition Bureau believes that competition will be stronger if the Shaw acquisition is rejected and Freedom Mobile operates alone," Péladeau told a conference call with financial analysts Thursday, after the release of the company's second-quarter results. "It (Freedom Mobile) will be a much weaker competitor.”

Péladeau said Quebecor is determined to pursue its national growth ambitions. On June 17, its Videotron subsidiary signed a conditional agreement with Rogers Communications and Shaw Communications to acquire Freedom Mobile for a total amount of $2.85 billion on a cash-free, debt-free basis.

There are still many regulatory issues to be clarified regarding Quebecor's expansion plans outside Quebec. The transaction with Rogers and Shaw still needs to be approved. Meanwhile, the Canadian Radio-television and Telecommunications Commission has not yet clarified the regulatory conditions surrounding its decision to allow regional operators to lease access to the networks of major Canadian telecommunications companies.

The more time it takes to approve Quebecor's bid for Freedom Mobile, the longer the Canadian telecommunications market will be less competitive, Péladeau said.

"With all due respect, we believe that the longer the Competition Bureau and the CRTC wait to act, the longer they encourage an oligopoly that limits competition outside of Quebec."

Earlier Thursday, the Montreal-based telecom and media company reported a rise in profits in the second quarter even as revenue fell compared with the same period a year earlier. The company said profit attributable to shareholders rose year-over-year by $33.9 million for a total of $157.4 million or $0.66 per diluted share.

Adjusted income from ongoing operating activities increased by $3.4 million, to $161.7 million, or $0.68 per basic share, as operating cash flow increased by 6.8 per cent over the same period.

Quebecor said its telecommunications sector posted an increase of 11.9 per cent, or $39.3 million for the quarter ended June 30.

The company's revenues were $1.12 billion in the second quarter of 2022, down $16 million, or 1.4 per cent from the same period in 2021.

This report by The Canadian Press was first published Aug. 4, 2022.

Stéphane Rolland, The Canadian Press

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