John A. MacDonald, a board member since 2012, ‘has assumed the role of Chairman of the Board of Directors,’ according to the statement
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Directors of Rogers Communications Inc. have voted to oust Edward Rogers, son of the company’s founder, as chair of the board after a fractious few weeks that began with his attempt to replace chief executive Joe Natale in a major management shakeup, according to sources close to the board.
In a brief statement released late Thursday, Rogers Communications confirmed that Edward Rogers “has moved from the role of Chairman effective today,” though he will remain on the board as a director.
John A. MacDonald, a board member since 2012, who also served as lead director and chair of the corporate governance committee “has assumed the role of Chairman of the Board of Directors,” according to the statement.
“This has been a challenging time for the Corporation and I want to reaffirm on behalf of the majority of the Board our support for and total confidence in the management team and CEO of Rogers Communications,” MacDonald said.
In an initial attempt to quell the corporate disruption, which has divided the Rogers family, the board had created an executive oversight committee to “establish clear protocols” to manage interactions between senior leadership and the board chair.
The new three-member committee — whose members included Rogers’ sister, deputy-chair Melinda Rogers-Hixon, MacDonald, a long-time industry leader who held roles at BCE Inc. and Allstream Business Inc., and another independent director John Clappison — was made public in management discussion accompanying Rogers’ third-quarter financial report Thursday, but had been in the works for weeks and came amid reports that Edward is now seeking to replace at least some of the company’s independent directors.
Sources familiar with the situation say Edward has obtained a list of the company’s shareholders, which would be needed to pursue board changes. Independent directors had objected to handing it over, due to uncertainty about whether Edward was acting with support of the voting trust through which his company controls Rogers Communications, these sources say. The directors also expressed concern that the ongoing disruption was hurting the company and could be detrimental to its planned $26 billion (including debt) purchase of rival Shaw Communications Inc., the sources said.
The dispute has divided the Rogers family, with Edward’s mother Loretta Rogers and sisters Martha Rogers and Rogers-Hixon opposing his plan to oust Natale.
Sources familiar with the situation who were not authorized to speak publicly about it say the advisory committee to the Rogers Control Trust, the entity through which the family controls the company, has held discussions over whether conditions should be placed on how Edward, who is chair of the trust, can vote the class A shares it holds.
It was not immediately clear how his departure as chair of Rogers will affect those discussions, or whether it would halt any efforts to reshape the board.
Bloomberg News reported Thursday that Edward had produced a list of preferred candidates to replace independent directors at the company. According to the report, the list contained five names including former CTV media chief executive Ivan Fecan and Jan Innes, a long-time communications and government-relations adviser at Rogers. She remains a director of the Rogers Group of Funds, which supports film and television funding, according to her LinkedIn page.
Natale, who has said little since Edward attempted to replace him with chief financial officer Tony Staffieri, responded to questions about the dispute on a conference call with analysts following Thursday morning’s release of the company’s financials.
“I’ve got strong, unequivocal support from the board to direct the strategy of the company,” he said, adding that he will “keep driving the operational initiatives … and continue to drive the improvements and momentum that you’re seeing.”
He told analysts the corporate drama has not changed his views on the company’s proposed transformational takeover of rival Shaw Communications.
“I’m feeling as comfortable as I have been in the past with the Shaw transaction, both in terms of our ability to get it approved and the synergies that stand behind it,” Natale said.
I’ve got strong, unequivocal support from the board to direct the strategy of the company
Joe Natale
Rogers’ revenues grew marginally in the third quarter from a year ago. The Toronto-based telecom reported sales of $3.67 billion for the three months ended Sept. 30, led by growth in the wireless business and lower churn rates. Rogers added a net 175,000 postpaid wireless subscribers, all in the cellphone category, which helped boost wireless service revenues by three per cent.
Meanwhile, the cable division’s revenues grew three per cent as more internet customers moved over to higher speed and usage tiers.
The company has also experienced its lowest churn rate on record, it said in its release. David Fuller, president of Rogers Wireless attributed it to improvements at the base management level and within the retail spaces and call centres. As well, the shift of more customers onto unlimited data plans has caused them to stay. “The final one I’d point to is the material and significant network investments that we have made, improving the quality and capability and coverage of our 5G network,” Fuller told analysts.
There is still plenty of turf for Rogers to regain despite blended average revenues per user increasing four per cent sequentially. The metric will tick up as the economy reopens and people can begin travelling again, which would boast roaming charges for the telecom, Fuller said. The company is “in the range of 50 per cent” of 2019 roaming levels, he added, despite year-on-year growth and quarter-on-quarter growth.
Though it’s dealing with some supply chain issues for its cable business and from mobile phone producers such as Samsung Electronics Co. Ltd. and Apply Inc., which are facing chip shortages, Natale said the company is well suited to weather global backlogs for its 5G network expansion. “We’ve been stockpiling and building up inventory to make sure we don’t have a challenge,” he said, adding that in its 4G rollout, Rogers had installed 5G radios on its towers.
“While messy boardroom and family discussions continue to play out in the media, the Q3 results from Rogers show meaningful signs of improvement on many key metrics,” TD Securities analyst Vince Valentini wrote in a note to clients.
Net income dropped four per cent in the quarter to $490 million on lower adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), which fell two per cent to $1.6 billion largely due to a drop in the media line of the business. Diluted earnings per share dropped seven per cent to $0.94.
Rogers shares closed down 1.75 per cent to end the trading day at $60.19.
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Tesla has promised to start selling cheaper models next year, days after a Reuters report revealed that the company had shelved its plans for an all-new Tesla that would cost only $25,000.
The news that Tesla was scrapping the Model 2 came amid a drop in sales and profits, and a decision to slash a tenth of the company’s global workforce. Reuters also noted increased competition from Chinese EV makers.
Tesla’s deliveries slumped in the first quarter for the first annual drop since the start of the pandemic in 2020, missing analyst forecasts by a mile in a sign that even price cuts haven’t been able to stave off an increasingly heated competition on the EV market.
Profits dropped by 50%, disappointing investors and leading to a slump in the company’s share prices, which made any good news urgently needed. Tesla delivered: it said it would bring forward the date for the release of new, lower-cost models. These would be produced on its existing platform and rolled out in the second half of 2025, per the BBC.
Reuters cited the company as warning that this change of plans could “result in achieving less cost reduction than previously expected,” however. This suggests the price tag of the new models is unlikely to be as small as the $25,000 promised for the Model 2.
The decision is based on a substantially reduced risk appetite in Tesla’s management, likely affected by the recent financial results and the intensifying competition with Chinese EV makers. Shelving the Model 2 and opting instead for cars to be produced on existing manufacturing lines is the safer move in these “uncertain times”, per the company.
Tesla is also cutting prices, as many other EV makers are doing amid a palpable decline in sales in key markets such as Europe, where the phaseout of subsidies has hit demand for EVs seriously. The cut is of about $2,000 on all models that Tesla currently sells.
By Charles Kennedy for Oilprice.com
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Divisions within the Bank of Canada over the timing of a much-anticipated cut to its key overnight interest rate stem from concerns of some members of the central bank’s governing council that progress on taming inflation could stall in the face of stronger domestic demand — or even pick up again in the event of “new surprises.”
“Some members emphasized that, with the economy performing well, the risk had diminished that restrictive monetary policy would slow the economy more than necessary to return inflation to target,” according to a summary of deliberations for the April 10 rate decision that were published Wednesday. “They felt more reassurance was needed to reduce the risk that the downward progress on core inflation would stall, and to avoid jeopardizing the progress made thus far.”
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Others argued that there were additional risks from keeping monetary policy too tight in light of progress already made to tame inflation, which had come down “significantly” across most goods and services.
Some pointed out that the distribution of inflation rates across components of the consumer price index had approached normal, despite outsized price increases and decreases in certain components.
“Coupled with indicators that the economy was in excess supply and with a base case projection showing the output gap starting to close only next year, they felt there was a risk of keeping monetary policy more restrictive than needed.”
In the end, though, the central bankers agreed to hold the rate at five per cent because inflation remained too high and there were still upside risks to the outlook, albeit “less acute” than in the past couple of years.
Despite the “diversity of views” about when conditions will warrant cutting the interest rate, central bank officials agreed that monetary policy easing would probably be gradual, given risks to the outlook and the slow path for returning inflation to target, according to the summary of deliberations.
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They considered a number of potential risks to the outlook for economic growth and inflation, including housing and immigration, according to summary of deliberations.
The central bankers discussed the risk that housing market activity could accelerate and further boost shelter prices and acknowledged that easing monetary policy could increase the likelihood of this risk materializing. They concluded that their focus on measures such as CPI-trim, which strips out extreme movements in price changes, allowed them to effectively look through mortgage interest costs while capturing other shelter prices such as rent that are more reflective of supply and demand in housing.
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They also agreed to keep a close eye on immigration in the coming quarters due to uncertainty around recent announcements by the federal government.
“The projection incorporated continued strong population growth in the first half of 2024 followed by much softer growth, in line with the federal government’s target for reducing the share of non-permanent residents,” the summary said. “But details of how these plans will be implemented had not been announced. Governing council recognized that there was some uncertainty about future population growth and agreed it would be important to update the population forecast each quarter.”
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Shares in US tech giant Meta have sunk in US after-hours trading despite better-than-expected earnings.
The Facebook and Instagram owner said expenses would be higher this year as it spends heavily on artificial intelligence (AI).
Its shares fell more than 15% after it said it expected to spend billions of dollars more than it had previously predicted in 2024.
Meta has been updating its ad-buying products with AI tools to boost earnings growth.
It has also been introducing more AI features on its social media platforms such as chat assistants.
The firm said it now expected to spend between $35bn and $40bn, (£28bn-32bn) in 2024, up from an earlier prediction of $30-$37bn.
Its shares fell despite it beating expectations on its earnings.
First quarter revenue rose 27% to $36.46bn, while analysts had expected earnings of $36.16bn.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said its spending plans were “aggressive”.
She said Meta’s “substantial investment” in AI has helped it get people to spend time on its platforms, so advertisers are willing to spend more money “in a time when digital advertising uncertainty remains rife”.
More than 50 countries are due to have elections this year, she said, “which hugely increases uncertainty” and can spook advertisers.
She added that Meta’s “fortunes are probably also being bolstered by TikTok’s uncertain future in the US”.
Meta’s rival has said it will fight an “unconstitutional” law that could result in TikTok being sold or banned in the US.
President Biden has signed into law a bill which gives the social media platform’s Chinese owner, ByteDance, nine months to sell off the app or it will be blocked in the US.
Ms Lund-Yates said that “looking further ahead, the biggest risk [for Meta] remains regulatory”.
Last year, Meta was fined €1.2bn (£1bn) by Ireland’s data authorities for mishandling people’s data when transferring it between Europe and the US.
And in February of this year, Meta chief executive Mark Zuckerberg faced blistering criticism from US lawmakers and was pushed to apologise to families of victims of child sexual exploitation.
Ms Lund-Yates added that the firm has “more than enough resources to throw at legal challenges, but that doesn’t rule out the risks of ups and downs in market sentiment”.
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