Quebecor Inc. Reports Stable Growth in Q2 2024

Quebecor Inc. (QBR.B) has released its financial results for the second quarter of 2024, revealing a solid performance with a consolidated EBITDA of CAD 625 million, which is CAD 20 million higher than last year. The company has effectively integrated Freedom Mobile, resulting in significant growth in registered wireless users and the introduction of new home services. With a strong focus on customer service and network expansion, Quebecor reported a net income of CAD 208 million and upheld a low net debt-to-EBITDA ratio, reinforcing its position in the telecom industry.

### Key Takeaways

– Quebecor achieved a consolidated EBITDA of CAD 625 million, reflecting a CAD 20 million increase from the prior year.
– The consolidated cash flow from operations was steady at CAD 450 million.
– Following the acquisition of Freedom Mobile, over 300,000 new wireless registered users (RGUs) were added.
– The company launched affordable Freedom Home Internet and TV services.
– It recorded its highest quarterly net additions with 93,000 new RGUs.
– Quebecor’s net debt-to-EBITDA ratio stands at an industry-low 3.39 times.
– Liquidity at the end of the quarter was above CAD 2.1 billion.
– The company repurchased and canceled 940,000 Class B shares for CAD 28 million.

### Company Outlook

– Quebecor plans to continue its deleveraging efforts, aiming to maintain a net debt-to-EBITDA ratio in the low 3s.
– The company is set to expand its network into Manitoba while continuing to invest in 5G technology.
– It will prioritize selling internet bundles to existing wireless customers before targeting non-mobile users.

### Challenges

– The Sports and Entertainment segment faced a 7% revenue decline, with EBITDA down by CAD 1 million.
– The advertising sector saw a downturn, affecting the media segment.

### Positive Highlights

– There was growth in the wireline segment, with an increase of 1,000 Internet customers.
– The media segment of TVA Group reported favorable EBITDA changes due to retroactive adjustments to carriage fees.
– Revenues for the first half of the year increased by 9% to CAD 2.7 billion, with EBITDA rising by 13% to CAD 1.18 billion.

### Financial Misses

– There were no notable financial misses mentioned during the earnings call.

### Q&A Highlights

– CEO Pierre Karl Péladeau reiterated a commitment to service quality over price competition.
– CFO Hugues Simard reported a 1% increase in wireless EBITDA to CAD 254 million.
– The introduction of North American roaming packages has been positively received by customers.
– Quebecor anticipates improvement in the advertising market despite current tough conditions and remains committed to customer service and product quality.

In summary, Quebecor Inc. has demonstrated strong financial results in the second quarter of 2024, with a notable increase in wireless customers and the successful launch of new home services. Strategic investments in branding and advertising for its brands, along with a disciplined expansion approach, have bolstered the company’s growth. Despite challenges in the Sports and Entertainment segment and a competitive advertising landscape, Quebecor’s overall revenue and EBITDA growth reflect its resilience and dedication to enhancing its balance sheet. With a stable churn rate and a customer-focused strategy, Quebecor is well-equipped to maintain its competitive advantage in the telecom market.