BCE(US:BCE)2025-08-07 12:36Financial Performance - BCE reported consolidated net earnings of CAD 1,200 million for Q2 2025, representing a 5% increase compared to Q2 2024[1]. - The company achieved an adjusted EBITDA of CAD 2,500 million, reflecting a 4% year-over-year growth[1]. - Operating revenues for Q2 2025 were CAD 6,000 million, up 6% from the same quarter last year[1]. - Net earnings for Q2 2025 were $644 million, reflecting a 6.6% increase year-over-year, while net earnings attributable to common shareholders rose by 7.8% to $579 million[19][23]. - Adjusted EBITDA decreased by 0.9% to $2,674 million, with an adjusted EBITDA margin of 43.9%, down 1.0 percentage points from the previous year[19][24]. - BCE's free cash flow increased by 5.0% to $1,152 million in Q2 2025, supported by lower capital expenditures[21][28]. - Cash flows from operating activities decreased by 8.9% to $1,947 million, primarily due to higher severance and other costs[21][27]. - BCE's adjusted EBITDA margin for Q2 2025 was 43.9%, down from 44.9% in Q2 2024[43]. - BCE's EPS for Q2 2025 was $0.63, an increase of $0.04 compared to the same period last year[83]. Customer Metrics - Customer connections increased by 3% year-over-year, reaching a total of 10 million connections[1]. - BCE's total mobile phone subscribers reached 10.4 million as of June 30, 2025, reflecting a 0.4% increase[18]. - Mobile phone net subscriber activations in Q2 2025 were 94,479, a decline of 27.9% compared to Q2 2024, with postpaid activations down 43.3%[44]. - BCE's total customer connections reached 21,809,935 in Q2 2025, reflecting a slight increase of 0.1% year-over-year[45]. - Retail IPTV subscribers experienced a loss of 15,851 in Q2 2025, contributing to a total decline of 31,822 year-to-date[44]. - Retail high-speed Internet net subscriber activations in Q2 2025 were 4,999, a decline of 79.0% compared to Q2 2024[93]. - Retail IPTV net subscriber losses increased by 14,538 in Q2 2025, with total subscribers down 1.1% year over year[118][119]. Debt and Liquidity - BCE's net debt stood at CAD 20 billion, with a net debt to adjusted EBITDA ratio of 3.5x[1]. - Net debt decreased by 9.1% to $36.615 billion as of June 30, 2025, from $40.299 billion at the end of 2024[142]. - Cash increased by 67.7% to $507 million, reflecting improved liquidity management[142]. - Total available liquidity at June 30, 2025, was $3.8 billion, down from $4.5 billion at December 31, 2024[198]. - BCE completed the sale of its 37.5% stake in MLSE for gross proceeds of $4.7 billion on July 1, 2025, directing the net proceeds towards the acquisition of Ziply Fiber[199]. - BCE's cash, cash equivalents, and available liquidity are expected to meet 2025 cash requirements for capital expenditures, dividends, and other obligations[200]. Strategic Initiatives - The company plans to launch Bell AI Fabric, aiming to establish 10 AI data centers by the end of 2026 to support Canada's AI ecosystem[7]. - BCE is in the process of acquiring Northwest Fiber Holdco, LLC, which is expected to enhance its growth prospects in underserved markets[7]. - The proposed sale of BCE's home security assets to a.p.i. ALARM Inc. is anticipated to generate proceeds of approximately CAD 500 million[7]. - BCE entered into an agreement to sell its home security and monitored alarm assets for expected proceeds of $90 million, with additional contingent proceeds of up to $80 million[33]. - Partnership with Zoom to offer "Workplace from Bell and Zoom," enhancing collaboration tools for Canadian enterprises[87]. - A strategic investment in Blink49 Studios aims to enhance production capabilities and is expected to close in the second half of 2025[128]. Market Challenges - The company faces risks from competitive activity and regulatory changes that could impact its operational performance[12]. - The company expects ongoing challenges in the Canadian economy, including slower population growth and trade policy uncertainties impacting consumer spending[40]. - BCE anticipates stable consumer price index (CPI) inflation and ongoing labor market softness affecting its business outlook[40]. Revenue Breakdown - Service revenues decreased by 0.8% to $5,267 million in Q2 2025, and year-to-date service revenues were $10,439 million, down 0.6%[52]. - Wireless revenues decreased by 0.3% in Q2 2025 and by 0.6% year-to-date, impacted by competitive pricing pressures and reduced roaming revenues[100]. - Advertising revenues decreased by 3.1% in Q2 2025, primarily due to lower demand for traditional broadcast TV advertising, partially offset by increased out-of-home advertising revenues[138]. - Digital revenues rose by 8.7% in Q2 2025 and 10.3% year-to-date, contributing to the overall growth in operating revenues[135]. Capital Expenditures - Capital expenditures for BCE were $763 million in Q2 2025, down $215 million (22.0%) from Q2 2024, and $1,492 million year-to-date, down $488 million (24.6%) compared to the previous year[152][153]. - The capital intensity ratio for BCE was 12.5% in Q2 2025, a decrease of 3.8 percentage points from the same period last year[153]. Ratings and Outlook - DBRS downgraded Bell Canada's issuer rating to BBB from BBB (high) due to ongoing debt leverage above thresholds[196]. - S&P revised its outlook on BCE and Bell Canada to negative from stable, citing ongoing debt leverage concerns[195]. - BCE's preferred shares rating was confirmed at Pfd-3, with the outlook associated with DBRS ratings remaining stable[196].