Rogers Communications(RCI) - 2024 Q1 - Quarterly Report

Financial Performance - Total revenue for 2023 reached CAD 19,308 million, a 25% increase from CAD 15,396 million in 2022[72] - Total service revenue increased by 27% to CAD 16,845 million, up from CAD 13,305 million in the previous year[72] - Adjusted EBITDA rose by 34% to CAD 8,581 million, compared to CAD 6,393 million in 2022[72] - Adjusted EBITDA margin improved to 44.4%, an increase of 2.9 percentage points from 41.5%[72] - Net income decreased by 49% to CAD 849 million, down from CAD 1,680 million in 2022[72] - Adjusted net income increased by 26% to CAD 2,406 million, compared to CAD 1,915 million in the previous year[72] - Basic earnings per share fell to CAD 1.62, a 51% decrease from CAD 3.33 in 2022[72] - Free cash flow increased by 36% to CAD 2,414 million, up from CAD 1,773 million in 2022[72] Capital Expenditures and Investments - Capital expenditures for 2023 were CAD 3,934 million, an increase of 28% from CAD 3,075 million[72] - The company invested a record $3.9 billion in capital expenditures, primarily in wireless and wireline network infrastructure[162] - Capital expenditures totaled$3,934 million, exceeding the guidance range of $3,700 million to$3,900 million[172] Shaw Transaction - The Shaw Transaction was completed for a total consideration of $20.5 billion, enhancing the company's scale and capabilities in telecommunications[95] - The acquisition included$8.0 billion in property, plant, and equipment, and $6.0 billion in intangible assets, resulting in a significant increase in depreciation and finance costs[103] - The Shaw Transaction was successfully completed in April 2023, enhancing service capabilities and customer support[172] - Targeted cost synergies from the Shaw acquisition are expected to materially increase adjusted EBITDA and net income on an ongoing basis[104] Subscriber Growth and Service Revenue - Wireless service revenue grew by 9$6.962 billion, reflecting a higher average revenue per account (ARPA) of $142.58[237] Debt and Liquidity - The debt leverage ratio was 5.0 as of December 31, 2023, up from 3.3 in 2022, reflecting the impact of the Shaw Transaction[90] - The company ended the year with approximately$5.9 billion in available liquidity, an increase from $4.9 billion in 2022[92] - Rogers Communications has$19 billion in cash, including $13 billion in cash and restricted cash, and$6 billion borrowed from a non-revolving term loan facility[105] - The Shaw Transaction is expected to significantly impact the company's capital structure, with plans to return the debt leverage ratio to approximately 3.5 within 36 months[208] Network and Service Expansion - The company serves over 2,200 communities with the largest 5G network in Canada as of December 31, 2023[109] - The company expanded its 5G network to 267 new communities and launched 5G service in the busiest sections of the Toronto Transit Commission subway system[162] - The company is focused on connecting more Canadians to its coast-to-coast Internet network and delivering reliable connectivity[165] - The company is investing in fixed wireless access services and expanding its cable footprint to connect rural and underserved areas, focusing on next-generation broadband wireless data networks like 5G[193] Media and Other Operations - Rogers has a diversified media portfolio, including rights to deliver over 1,300 NHL games per season through the 2025-2026 NHL season[116] - The company operates several television networks and 52 radio stations across Canada, reaching a wide audience[119] - Media revenue increased by 3% to $2.335 billion, driven by advertising sales and subscriptions[246][247] - Adjusted EBITDA for media operations rose by 12$77 million, with an adjusted EBITDA margin of 3.3%[246] Future Outlook - For 2024, the company expects total service revenue to increase by 8% to 10% and adjusted EBITDA to rise by 12% to 15%[181] - The company plans to maintain capital expenditures between $3,800 million and$4,000 million in 2024[181] - The company aims to return cash to shareholders while maintaining network advantages in a competitive market[180]