You are here: Home > News > Headlines
“I am very pleased with our results this quarter as we continued to execute and again achieved improved trends from those we experienced in 2011,” said Karen Sheriff, president and chief executive officer, Bell Aliant. “I am particularly pleased with our performance in our fibre-to-the-home markets, where we continued to see strong growth in TV and Internet revenues, along with improved retention of our traditional voice business.
“As we have stated many times before, growing FibreOP is the key to returning our overall revenue and profitability to positive growth. We continue to expect to pass 650,000 homes and businesses with the service this year, and, assuming continued strong fibre performance, expect to further expand our coverage in the future. We expect to have more details on the timing of further builds in the coming quarters.
"While our Board will always have discretion regarding our annual business plans and dividend decisions, we plan to manage the pace of the build such that we can maintain the current dividend during this period of further fibre investment. As we’ve said in the past, we continue to believe that our dividend is sustainable and that FTTH is an investment that is focused on returning us to positive growth, providing even further dividend support."
Second quarter 2012 highlights1
Second quarter financial highlights of Bell Aliant GP are summarized as follows:
Operating revenues in the second quarter of 2012 were $688 million, down $5 million (0.7 per cent) from the same quarter in 2011. Declines in local and long distance revenues driven by lower network access services (NAS) were largely offset by growth in all other major revenue categories, led by TV and Internet.
Operating expenses in the second quarter of 2012 were down slightly from the same quarter in 2011 as productivity gains and reductions in equity-based compensation expenses offset growth in TV content costs from higher FibreOP TV sales and other costs of revenues. As a result, the EBITDA decline was held to $4 million (1.1 per cent) in the second quarter of 2012 compared to the same quarter in 2011.
Capital expenditures in the second quarter of 2012 increased $23 million (14.8 per cent) from the same quarter a year earlier. Costs associated with preparatory information technology and construction work for launching fibre-to-the-home in Bell Aliant’s central Canada territory, and connecting more customers to the FTTH network than the same quarter in 2011, drove the increase in capital expenditures. In the second quarter of 2012, Bell Aliant passed an additional 58,000 homes and businesses with FTTH, bringing its total FTTH coverage to 574,000 premises at the end of June 2012. Planned FTTH spending was weighted towards the first half of 2012 as Bell Aliant prepared for its FTTH launch in central Canada. Capital expenditures are expected to moderate in the second half of the year. Bell Aliant continues to expect 2012 annual capital expenditures to be within its guidance range of $550 million to $600 million.
Free cash flow was $165 million in the second quarter of 2012, down $26 million from the same quarter a year earlier. The decrease was primarily a result of higher capital spending and lower EBITDA in the second quarter of 2012 compared to 2011, which was somewhat offset by lower regular pension funding than the same quarter in 2011.
Internet revenue increased $7 million (5.8 per cent) in the second quarter of 2012 compared to the same period in 2011. Residential high-speed average revenue per customer (ARPC) in the second quarter of 2012 was up 5.1 per cent from the same quarter a year earlier as a result of selected pricing action and customer movement to premium services.
Overall net high-speed Internet customer additions were 4,300 in the second quarter of 2012, bringing total high-speed Internet customers to 906,200 at the end of June 2012, up 2.6 per cent from a year earlier. Excluding the loss of some low-margin wholesale Internet lines, high-speed Internet customer net additions improved to 7,300 in the second quarter of 2012 from 5,600 in the second quarter of 2011. FibreOP Internet customers grew by 15,200, bringing total FibreOP Internet customers to 75,500 at the end of June 2012. Approximately one half of FibreOP Internet net adds in the second quarter of 2012 were customers migrating from DSL and fibre-to-the-node networks, which would not have contributed to overall high-speed customer growth but, increasingly contributes to improved customer retention and growth in overall customer ARPC.
IPTV revenue reached $19 million in the second quarter of 2012 with total IPTV customers of 95,100 at the end of June 2012. FibreOP TV customers grew by 13,000 in the quarter to reach 65,300, a portion of which were migrations from Bell Aliant TV. Overall net IPTV customer additions were 10,200 in the second quarter of 2012, compared to 5,500 a year earlier.
Other data revenue grew $2 million (2.0 per cent) in the second quarter of 2012 from the same quarter a year earlier, continuing the improved trends of recent quarters as a result of data demand growth.
Wireless revenues were up $4 million (14.6 per cent) driven by 8.0 per cent customer growth and 5.9 per cent wireless ARPC growth compared to a year ago as customers subscribe to higher value plans. Other revenues also increased $3 million (6.6 per cent) in the second quarter compared to a year ago, driven by higher product sales and increased pole attachment fees.
Bell Aliant Preferred Equity Inc. today declared a dividend on its Series A Preferred Shares of $0.303125 per share and a dividend on its Series C Preferred Shares of $0.284375 per share to be paid on September 28, 2012 to shareholders of record at the close of business on September 14, 2012.
A live audio webcast of the conference call can be accessed at www.bellaliant.ca under the Investor Relations section. A replay of the conference call will be available on the website for one year.
1See Notes section at the end of this release for definitions of the non-International Financial Reporting Standard (IFRS) financial measures including EBITDA, free cash flow and adjusted earnings per share.
The information contained in this news release is unaudited.
(1) Bell Aliant derives virtually all of its income from its ownership in Bell Aliant GP. Bell Aliant GP’s results consolidate the results of Bell Aliant Regional Communications, Limited Partnership; Télébec, Limited Partnership; NorthernTel, Limited Partnership; and Bell Aliant Preferred Equity Inc.
(2) Percentage changes quoted in this release related to dollar values are based on amounts rounded to the nearest hundred-thousand, consistent with disclosure in Bell Aliant’s supplementary information package and Bell Aliant GP’s MD&As for the second quarter of 2012. Dollar values quoted in this release are rounded to the nearest million unless otherwise stated. Unit values are rounded to the nearest hundred unless otherwise stated.
(3) Definitions of non-IFRS measures:
a. EBITDA: Bell Aliant defines EBITDA as operating revenue less operating expenses (operating income) before interest, income taxes, depreciation and amortization expense, severance and other charges.
b. Free cash flow: Bell Aliant defines free cash flow as cash generated from operating activities less capital expenditures. Free cash flow includes the operations of Bell Aliant and Bell Aliant GP on a combined basis.
c. Adjusted earnings per share: Bell Aliant defines adjusted earnings per share as fully diluted earnings per share adjusted for the after-tax per share impact of amortizing purchase price allocations (amounts which represent the adjustments to historical cost of tangible and intangible assets acquired in business combinations).
For a reconciliation of these non-IFRS measures to the most closely comparable IFRS measures, please refer to Bell Aliant GP’s MD&A for the second quarter of 2012 available at www.bellaliant.ca/investors and www.sedar.com .
Should any risk factor affect Bell Aliant in an unexpected manner, or should assumptions underlying the forward-looking statements prove incorrect, the actual results or events may differ materially from the results or events predicted. Unless otherwise indicated, forward-looking information does not take into account the effect that transactions, or non-recurring or other special items, announced or occurring after this information is provided may have on the business. All forward-looking information reflected in this news release and the documents referred to within it are qualified by these cautionary statements. There can be no assurance that the results or developments anticipated by Bell Aliant will be realized or, even if substantially realized, that they will have the expected consequences for Bell Aliant.
Except as may be required by Canadian securities laws, Bell Aliant disclaims any intention and assumes no obligation to update or revise any forward-looking information, even if new information becomes available, as a result of future events or for any other reason. Readers should not place undue reliance on any forward-looking information. Forward-looking information is provided for the purpose of providing information about management’s current expectations and plans relating to fiscal 2012 or other future periods. Readers are cautioned that such information may not be appropriate for other purposes.
About Bell Aliant
For more information contact: