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Rogers free cash flow rises 65 per cent

Rogers increased third-quarter free cash flow by 65 per cent as capital expenditure fell sharply. Revenue grew only modestly, while adjusted profit declined. Last year’s large non-cash gain from its sports investment also distorted the comparison in reported net income. The Canadian telecommunications group maintained its annual outlook after the quarterly results.

Economics & Markets··Midday
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Lower investment spending supports cash generation

Canadian telecommunications group Rogers Communications reported stronger cash flow alongside lower capital spending in its third-quarter results, released on 23 October. The quarter ended on 30 September.[1], [2]

Free cash flow increased 65 per cent, from 829 million to 1.370 billion Canadian dollars. Capital expenditure fell 46 per cent to 524 million Canadian dollars. Rogers attributed the cash-flow increase to lower investment spending, higher adjusted operating earnings and lower cash income taxes. Proceeds from sales of certain network assets reduced its capital-expenditure measure.[1]

Revenue growth remains modest

Revenue rose 2 per cent to 5.443 billion Canadian dollars, while total service revenue grew 1 per cent to 4.780 billion Canadian dollars. Wireless service revenue declined 1 per cent, cable service revenue was stable and media revenue increased 9 per cent. Adjusted net income decreased 3 per cent to 701 million Canadian dollars.[1]

Last year’s valuation gain changes the profit comparison

Reported net income fell from 5.768 billion to 495 million Canadian dollars. The earlier quarter included an approximately 5 billion Canadian dollar non-cash gain from revaluing the group’s investment in sports business Maple Leaf Sports & Entertainment, known as MLSE. Rogers maintained its full-year guidance for service revenue, adjusted operating earnings, capital expenditure and free cash flow.[1]

References

  1. News sourceRogers CommunicationsRogers free cash flow increases 65%↩1↩2↩3↩4
  2. News sourceInvesting.comRogers quarterly cash flow benefits from spending cuts↩
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