Rogers Communications(US:RCI)2022-04-20 15:08Financial Data and Key Metrics Changes - Wireless service revenue increased by 7% year-over-year, supported by improvements in smartphone loading, churn performance, and growth in ARPU [8][24] - Postpaid mobile phone net additions were 66,000, more than triple the volume from last year, with churn improving by 12 basis points to 0.71% [9][25] - Mobile phone ARPU was $57.25, up 3% from one year ago, reflecting improvements in roaming revenue [9][26] - Total revenue for Q1 was up 4% and total service revenue increased by 6% year-over-year, largely driven by the wireless business [34] - Adjusted EBITDA increased by 11% with an adjusted EBITDA margin of 42.5%, up 260 basis points [34] Business Line Data and Key Metrics Changes - In the cable segment, revenue was up 2% and adjusted EBITDA increased by 13%, driven by operational efficiencies and a modest price increase [10][28] - Media revenue grew by 10%, primarily due to higher sports-related advertising, although adjusted EBITDA fell by 12% due to increased programming and production costs [12][32] Market Data and Key Metrics Changes - The company reported strong postpaid mobile phone net customer additions, driven by low churn and increased market activity [24] - The cable business saw a slight decline in retail internet net customer additions, with 13,000 added in Q1, down from the previous year [31] Company Strategy and Development Direction - The company is focused on three priorities: better execution across businesses, increased investments in networks and customer service, and completing the Shaw transaction [5][6] - Significant investments were made in infrastructure, with a 34% increase in capital expenditures compared to last year, targeting close to $3 billion in infrastructure investment for the year [13][35] - The company aims to achieve $1 billion in synergies from the Shaw acquisition within the first 24 months post-closing [30][101] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's assets and execution, leading to an increased financial guidance for 2022 [16][41] - The company anticipates continued growth in service revenue and adjusted EBITDA, with expectations of a 7% improvement in wireless for Q2 [43] - Management noted that the competitive landscape remains intense, particularly in retail internet, but emphasized a shift towards whole home solutions [93] Other Important Information - The company successfully completed a $13.3 billion bond issuance to fund the Shaw transaction, with a weighted average cost of borrowing of 4.2% [38][39] - Cash flow from operating activities was over $800 million, up 20% year-over-year, largely due to higher adjusted EBITDA [15] Q&A Session Summary Question: Update on Shaw transaction and wireless landscape - Management refrained from commenting on rumors regarding the sale of Freedom Mobile but reiterated confidence in closing the Shaw transaction in Q2 [49][55] Question: Clarification on cable operating costs and content costs - Management indicated that some cost reductions are recurring, particularly in people costs, and emphasized ongoing efforts to achieve synergies ahead of the Shaw deal [60][62] Question: Competitive environment in retail internet - Management acknowledged the competitive landscape but noted a pivot towards whole home solutions, with a focus on increasing homes passed [93][95] Question: Path of deleveraging and inflation impact - Management confirmed the target of $1 billion in cost synergies post-closing and noted that inflationary pressures are being managed within the overall CapEx and OpEx structure [108][110]