CORPORATE FORTUNES

Rogers Profit Slides As Covid-19 Hits Revenue

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Canadian operator Rogers Communications recorded a double-digit decline in Q1 net profit, as the Covid-19 (coronavirus) pandemic put a serious dent in advertising and wireless equipment sales.

The operator pulled its guidance for the remainder of 2020, citing uncertainty caused by the crisis.

Net income fell 10 per cent year-on-year to CAD352 million (US$248.7 million), with overall revenue of CAD3.4 billion down 5 per cent.

The Media unit was hit hardest, with revenue falling 12 per cent to CAD412 million due to lower advertising and sports income. Wireless revenue fell 5 per cent to CAD2 billion, on lower equipment (down 17 per cent to CAD365 million), roaming and overage sales. Cable revenue remained flat at CAD973 million.

It shed 6,000 mobile subscribers in the quarter, compared with 23,000 net additions in Q1 2019.

On an earnings call, CFO Tony Staffieri said Covid-19 began to impact business in March and warned it expects to record a “more material” impact in the current quarter.

He noted “early signs of customers looking to downsize their packages” to cope with financial difficulties caused by the pandemic.

Staffieri said the volume of this activity will increase in proportion to the depth and duration of an economic downturn sparked by the crisis, impacting recurring revenue and ARPU in future.

In a letter to shareholders, president and CEO Joseph Natale acknowledged short-term financial hurdles, but insisted “the current environment does not impact the fundamental strength of our company nor the long-term prospects of our business”. Mobile World Live

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