John A. MacDonald, a board member since 2012, ‘has assumed the role of Chairman of the Board of Directors,’ according to the statement
Author of the article:
Barbara Shecter, Bianca Bharti
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
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.
Chipotle Mexican Grill Inc beat estimates for quarterly same-store sales on Thursday, as customers returned to eating inside restaurants and paid more than ever for a new meat – smoked brisket – and other menu items.
The burrito and bowl chain has raised regular menu prices twice and its delivery prices three times since August 2020. Prices are now about 10% higher – which includes a total 17% hike in items for delivery – to offset rising beef, freight and labor costs.
CEO Brian Niccol told Reuters that customers can still get a lot of value out of a Chipotle meal, noting that its chicken burrito is still priced under $8 in many places.
“Because we’ve got such a strong value proposition, we like to take things in phases to make sure that the pricing we’re taking is balanced with the growth that we’re experiencing and that the cost is really not a transitory cost but a new, permanent cost,” he said.
Overall, fast-food chains have raised menu prices by 6.7% over the last 12 months, and other restaurants by 5.2%, the U.S. Bureau of Labor Statistics reported on Oct. 13.
Some of Chipotle’s price hikes will roll off this quarter and customers have not resisted paying more for their quesadillas, Niccol said.
More customers are also coming to Chipotle restaurants as seating areas reopen, and the chain is still on track to build 200 new locations this year, he said.
Chipotle’s limited-time smoked brisket, which launched in September, costs $10.25 on average as an entree in restaurants, its most expensive new meat ever.
The fast-casual chain posted a 15.1% surge in comparable sales for the quarter ended Sept. 30, compared with analysts’ average estimate of 13.4% growth, according to Refinitiv data.
The company also forecast sales growth in the low to mid double-digits range in the current quarter, compared with estimates of 14% growth.
Americans who were cooking more in their kitchens during the pandemic-induced, work-from-home situation are now grabbing burritos and bowls on the way to work and social gatherings, and are trying new dishes.
Sales from digital orders – as opposed to those placed in person – grew 8.6% and accounted for 42.8% of sales.
Chipotle also said its board increased its share repurchase authorization by $100 million, with $209.8 million available to buy back shares as of Sept. 30.
(Reporting by Hilary Russ in New York and Praveen Paramasivam in Bengaluru; Editing by Aditya Soni, Jonathan Oatis and Daniel Wallis)
Energy Prices are expected to inch up in 2022 after surging more than 80% in 2021, fueling significant near-term risks to global inflation in many developing countries, the World Bank said in its latest Commodity Markets Outlook on Thursday.
The multilateral development bank said energy prices should start to decline in the second half of 2022 as supply constraints ease, with non-energy prices such as agriculture and metals also expected to ease after strong gains in 2021.
“The surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries,” said Ayhan Kose, chief economist and director of the World Bank’s Prospects Group, which produces the Outlook report.
“The sharp rebound in commodity prices is turning out to be more pronounced than previously projected. Recent volatility in prices may complicate policy choices as countries recover from last year’s global recession.”
The International Monetary Fund, in a separate blog https://blogs.imf.org/2021/10/21/surging-energy-prices-may-not-ease-until-next-year, said it expected energy prices to revert to “more normal levels” early next year when heating demand ebbs and supplies adjust. But it warned that uncertainty remained high and small demand shocks could trigger fresh price spikes.
The World Bank noted that some commodity prices rose to or exceeded levels in 2021 not seen since a spike a decade earlier.
Natural gas and coal prices, for instance, reached record highs amid supply constraints and rebounding demand for electricity, although they are expected to decline in 2022 as demand eases and supply improves, the bank said.
It warned that further price spikes could occur in the near-term given current low inventories and persistent supply bottlenecks. Other risk factors included extreme weather events, the uneven COVID-19 recovery and the threat of more outbreaks, along with supply-chain disruptions and environmental policies.
Higher food prices were also driving up food-price inflation and raising questions about food security in several developing countries, it said.
The bank projected crude oil prices would reach $74/bbl in 2022, buoyed by strengthening demand from a projected $70/bbl in 2021, before easing to $65/bbl in 2023.
The use of crude oil as a substitute for natural gas presented a major upside risk to the demand outlook, although higher energy prices may start to weigh on global growth.
The bank forecast a 5% drop in metals prices in 2022 after a 48% increase in 2021. It said agricultural prices were expected to decline modestly next year after jumping 22% this year.
It warned that changing weather patterns due to climate change also posed a growing risk to energy markets, potentially affecting both demand and supply.
It said countries could benefit by accelerating installation of renewable energy sources and by cutting their dependency on fossil fuels.
(Reporting by Andrea Shalal; editing by Diane Craft)
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