Quebecor (QBR-B) Q3 2024 earnings summary

Executive summary

• Achieved record quarterly wireless loading with 132,100 net additions, surpassing 4 million total mobile lines, and added 11,800 Internet customers in Q3 2024 across Videotron, Freedom, and Fizz.

• Wireless brands outperformed competitors, driven by customer experience, network improvements, and disciplined pricing.

• Regulatory wins on wholesale roaming rates support expansion, but CRTC's fiber access decision limits internet service growth.

• Customer satisfaction remains high, with Videotron rated best in customer service and churn rates declining across all brands.

• Cash flows from operating activities rose 10.1% year-over-year to $546.2M, enabling a $170M+ net debt reduction and leverage ratio improvement to 3.36x.

Financial highlights

• Q3 2024 revenues were CAD 1.4 billion, down 1.8% year-over-year; adjusted EBITDA was CAD 594 million, down CAD 30 million, mainly due to a CAD 26 million negative stock-based compensation variance.

• Net income attributable to shareholders was CAD 189 million (CAD 0.81/share), down from CAD 209 million (CAD 0.91/share) last year.

• Adjusted cash flow from operations decreased by CAD 27 million to CAD 135 million due to higher CapEx; free cash flow from operations rose 10.1% to CAD 546 million.

• Telecom segment revenues fell by 2.2% to CAD 1.2 billion, mainly from lower wireline revenues; wireless revenues rose 5% to CAD 600 million, with wireless EBITDA up 17% to CAD 271 million.

• Dividend payout ratio remains at the low end of the industry range, with a quarterly dividend of $0.325/share (3.7% yield) and free cash flow payout ratio at 30%.

Outlook and guidance

• CapEx for 2024 expected to be around CAD 600 million, with stability anticipated for 2025 except for increased wireline equipment investments due to a shift from sales to rentals.

• Annual price increases for internet and cable to resume in December, expected to offset revenue pressure in 2025.

• Focus remains on disciplined cost management, cross-Canada expansion, and value creation for stakeholders.

• Ongoing investment in network expansion and original content, with continued commitment to customer service leadership.

• Continued focus on deleveraging and maintaining net debt-to-EBITDA in the low threes.