Pierre Dion,

Quebecor posts Q2 net loss, revenues up

CEO Pierre Dion keeps up the pressure on Ottawa

Quebecor is keeping up the pressure on Ottawa to implement what it says are fair rules that would encourage its Videotron company to expand its wireless business outside Quebec.

“We will work at ensuring all conditions are right to minimize our risks,” president and CEO Pierre Dion (pictured) told analysts on a conference call to discuss second-quarter results, which showed tighter quarterly losses.

While Quebecor hasn’t committed to wireless expansion outside its home province, Dion wasted little time on the call before he launched into comments on what Videotron would need to become the country’s fourth national wireless carrier, one of the objectives of the federal government’s telecom policies.

He said lower wholesale roaming rates is one factor that would need to be implemented before the company can decide to make a foray into new territory. Quebecor launched its wireless service in the fall of 2010.

The Quebec company bought wireless spectrum earlier this year in Ontario, Alberta and British Columbia for $233 million, opening an opportunity for it to expand beyond its provincial borders to become a major wireless carrier after Rogers, Telus and Bell.

On Thursday, Quebecor Inc. narrowed its second-quarter net loss to $54.8 million, or 45 cents per share in the quarter, compared with a loss of $93.6 million, or 75 cents per share, in the same quarter of 2013.

Adjusted profits from continuing operations grew to $66 million, or 54 cents per share, which came in seven cents higher than analysts expected, according to a survey by Thomson Reuters.

Revenues were relatively flat, rising $6 million to $1.07 billion year-over-year, driven by its telecommunications division.

Quebecor also says it’s creating a new division called Media Group for its entertainment and news media properties, including Sun Media Corp. and TVA Group Inc.

The company’s telecommunications division had revenues of $20.7 million in the quarter, up 3.1% year-over-year.

Revenues in Quebecor’s news media division were down 7.3% to $14.6 million in the quarter.

“We believe that it will be difficult for Quebecor shares to outperform until national wireless expansion uncertainty is lifted,” said Canaccord Genuity analyst Dvai Ghose in a note.

“Unfortunately, we do not expect clarity until new wireless wholesale rules are released and this is only expected in spring 2015.”

The Canadian Radio-television and Telecommunications Commission will look into how much big wireless providers, such as Bell and Rogers, charge their smaller wireless competitors for use of their networks.

Shares of the company rose three cents to $26.50 on the Toronto Stock Exchange near midday.

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