Rogers Communications is a diversified Canadian communications and media company with its operations in Canada

Rogers ups dividend as Q4 adjusted profit rises, CEO announces retirement

Rogers says an increase in wireless revenue helps to boost its results in the fourth quarter, and announced that its CEO will retire in 2014.

Canadian telecoms giant Rogers Communications (TSE:RCI.B) posted fourth quarter results that topped views on strong growth in its wireless unit, and announced that president and CEO, Nadir Mohamed, has decided to retire in January 2014.

Mohamed, who in 2009 succeeded the late company founder Ted Rogers, joined Rogers in 2000. He held the role of president and CEO of Rogers Wireless from 2001 to 2005 and was appointed president and COO of Rogers Communications Group in 2005.

"Thanks to his disciplined and strategic management approach we've strengthened our core business, solidified our financial position and set Rogers up for long-term success,” said board chairman Alan Horn.

Rogers said its board will appoint a search committee and select a firm to begin an international search.

Meanwhile, the company said its fourth-quarter earnings from continuing operations rose 62 per cent to $529 million or $1.02 per share, compared with $327 million or 61 cents per share, in the year-ago period.

Adjusted earnings rose about 30 per cent to $455 million or 88 cents per diluted share, from $350 million or 66 cents, a year earlier.

For the period that ended December 31, revenue stood at $3.26 billion, up three per cent from year-ago revenue of $3.15 billion.

Analysts polled by Thomson Reuters had called for per share earnings of 72 cents on revenue of $3.19 billion.

"We exited 2012 with accelerating growth across our asset mix and with continued improvements in the strength of our key metrics," said Mohamed.

"It was a record quarter for smartphone sales in our wireless business where data revenue growth continues to accelerate. Our cable division executed well with strong Internet growth and industry-leading margins, and our media business continued to improve and grow.

“Importantly, we achieved or exceeded all of our full year financial guidance metrics and are well positioned for 2013."

Consolidated margins of 36.1 per cent were up 117 basis points, driven by strong adjusted operating profit margins of 40.2 per cent and 49.4 per cent at the wireless and cable businesses, respectively, the company noted.

During the quarter, Rogers added 58,000 net postpaid wireless subscribers, compared with 42,000 in the same period last year. Postpaid subscribers, who sign multi-year contracts, typically pay more each month than prepaid customers.

The company said it activated and upgraded about 940,000 smartphones, compared to 791,000 a year earlier, of which roughly 29 per cent were new subscribers.

The overall addition of smartphones increased the percentage of subscribers with smartphones to 69 per cent of the wireless unit's total postpaid subscriber base, compared to 56 per cent in the same period a year ago.

Wireless data revenue jumped 21 per cent to $727 million and blended average revenue per user grew 2.8 per cent to $60.48 from $58.82 a year earlier.

Rogers said that cable television revenue rose two per cent, while Internet revenue rose 11 per cent. Its high-speed Internet customer base stands at 1.9 million subscribers.

Media revenue increased one per cent, primarily driven by a 44-per-cent increase in sports entertainment revenue, the company said.

Rogers also increased its annualized dividend by 10 per cent to $1.74, and said effective immediately, the new quarterly dividend rate will be 43.5 cents per share.

Looking ahead, the company expects its 2013 operating profit to grow up to four per cent in 2013, with up to a three per cent gain in wireless and cable revenue and as much as a seven-per-cent rise in media revenue.