(Bloomberg) — Rogers Communications Inc., Canada’s largest wireless and cable firm, said it expects to return to growth this year under a new lineup of executives after profit fell during a tumultuous 2021.
New Chief Executive Officer Tony Staffieri has made leadership changes in the company’s wireless, cable and media divisions and said he’s still confident Rogers can close a $16 billion takeover of Shaw Communications Inc. in the first half of the year. The deal is being reviewed by antitrust and telecommunications regulators in Canada.
In its guidance, Rogers said it expects adjusted Ebitda to grow 6% to 8% this year above the 2021 level of C$5.89 billion ($4.7 billion). Total service revenue is expected to grow 4% to 6%.
The shares were up 2.5% to C$63.32 at 9:59 a.m. in Toronto.
In the fourth quarter, Rogers earned 96 Canadian cents a share on an adjusted basis, broadly in line with an average analyst forecast of 95 cents.
For the full year, the company earned C$1.56 billion, down 2% from the previous year. The sports and media division lost money because Covid-19 disrupted broadcasting schedules and the Toronto Blue Jays baseball team played the entire season with reduced attendance because of pandemic restrictions. But Staffieri said the division should see positive Ebitda this year.
It was the company’s first earnings report with Staffieri as CEO. He was fired as the company’s chief financial officer last September after he participated in a plot to oust CEO Joe Natale.
That was part of a wild series of events that included Chairman Edward Rogers suing the company founded by his late father and battling with his sisters and mother for control of the board. He won a court decision in early November, allowing him to push out five directors.
The board then voted to dump Natale and bring back Staffieri in the top executive post, over the objections of other members of the Rogers family.
The company said it incurred about C$62 million in costs related to the Shaw deal, including fees for lining up a credit facility, and another C$39 million in other restructuring expenses that were “primarily severance costs.”
Key Insights
- The company said it added 141,000 phones and 130,000 total net postpaid subscribers during the quarter. Bloomberg Intelligence analyst John Butler had expected 140,000; Wall Street expectations were for about 138,000.
- Revenue and adjusted Ebitda in the cable unit were flat compared with the previous year.
- Free cash flow for 2022 is expected to be C$1.8 billion to C$2 billion. Last year it was C$1.67 billion.
Market Reaction
- Rogers shares are up 5.3% YTD versus a 2% decline for the S&P/TSX Composite Index. Last year they gained 1.6% versus a 21.7% gain for the index.
(Updates with restructuring and severance costs and other changes)
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