<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Rogers Communications (
RCI) (
RCI-A.TO) reported a five per cent decrease in revenue in the first quarter of 2020, which it largely attributed to the impact of COVID-19. The carrier withdrew its 2020 financial guidance it originally issued in January due to the uncertainty surrounding the pandemic. ” data-reactid=”23″>Rogers Communications (
RCI) (
RCI-A.TO) reported a five per cent decrease in revenue in the first quarter of 2020, which it largely attributed to the impact of COVID-19. The carrier withdrew its 2020 financial guidance it originally issued in January due to the uncertainty surrounding the pandemic.
In the three months ending March 31, the Toronto-based national carrier reported total revenue of $3.416 billion, down from the $3.587 billion it reported in the same period a year ago.
“[This was] largely driven by a 17 per cent decrease in wireless equipment revenue, as a result of lower subscriber activity surrounding the COVID-19 pandemic,” the carrier said in its Q1 earnings report that was released on April 22.
“The wireless service revenue decrease was primarily a result of lower roaming revenue, with lower overall roaming activity and as we provided these services to our customers at no cost during the COVID-19 pandemic, and lower overage revenue, primarily as a result of the continued adoption of our Rogers ‘Infinite’ unlimited data plans.”
The carrier reported $352 million in net income, or 68 cents per share, down from $391 million, or 76 cents per share that it reported the same period a year before.
The carrier’s shares were down 4.05 per cent in pre-market trading, falling to US$40.80.
Rogers stated that it is “withdrawing the financial guidance” it reported in January as a result of the uncertainty surrounding the global coronavirus pandemic.
“We are unable at this time to predict the overall impact on our operations and financial results, but the impact may be material,” the carrier said in the report. “As a result, it is not possible at this time to reliably estimate the impact of the pandemic on our financial results for the remainder of the year.”
A Scotiabank report said that “guidance removal should no longer be a surprise given the uncertainty for the rest of 2020.”
“We believe the key is to focus on company’s comments on the areas impacted and assess the magnitude and assume a duration,” the report said. Scotiabank also said that Rogers will suffer the most in subscriber activation and retention, wireless roaming and overage revenue, cable business, and sports broadcasting and events, as a result of COVID-19.
Tony Staffieri, Rogers’ chief financial officer, said many customers are considering downsizing their packages in wireless and cable due to “elevating unemployment levels.”
“As the right size and their spend to their new cash flow realities, expect this volume will pick up depending on the depth and duration of the economic downturn, and will ultimately impact recurring ARPU, and revenue,” he said.
“As you would expect, we do not anticipate the subscriber market to reactivate in any material way until the public is allowed to safely return to malls and our stores. While the market was previously growing at approximately four per cent on an annual basis, this lack of subscriber growth rate will impact our revenue growth.”
Conversely, Staffieri said that the company spent $2 billion in handsets expenditures in Q1 2019 and this was down 60 per cent in the last few weeks of March.
“This will yield material cash savings that has already started,” he said.
The carrier said it added 257,000 monthly paid wireless subscribers, a decrease from the 295,000 subscribers it added in the same period a year ago.
The carrier’s monthly subscriber churn rate, the measure of subscribers who deactivate their service, was 0.93 per cent, a decrease from the 0.99 per cent it reported a year before.
Rogers’ Average Billing Per User (ABPU) for the quarter was $65.14, up from $64.62.
The carrier’s Average Revenue Per User (ARPU) for the quarter was $52.85, down from $54.13.
ABPU and ARPU results were in line with an RBC report that estimated similar numbers.
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