Quebecor’s Péladeau likes what he sees
CEO credits ‘solid strategic direction’ as stock jumps following strong Q4 results
Pierre Karl Péladeau has no plans to shake up Quebecor Inc.’s strategy now that he’s back at the helm, he told analysts after the communications and media company reported solid fourth-quarter results on Wednesday.
The Montreal-based company posted a profit of $123.3 million in the three months ending Dec. 31 compared with a $34.8 million loss in the same period of 2015. Financial and subscriber metrics were largely in line or better than analysts’ expectations for both the fourth quarter and the year.
Quebecor’s stock price dropped following the February announcement that Péladeau would resume his role as CEO after a stint in politics as head of the Parti Québécois, but the strong finish to 2016 appeared to assuage investors. By noon, the stock price climbed more than four per cent to surpass the price before the leadership change. It finished the day at $39.53, up 4.19 per cent in Toronto.
“We can affirm that our 2016 results were supported by a solid strategic direction involving all parts of our operations,” Péladeau said in a conference call with analysts.
Péladeau praised the management team and said the company would continue on the path it started when it purchased Videotron.
“The digitalization of the economy has favoured the exportation of content over multiple platforms. Our telecom services’ success is therefore closely linked to the richness of the content we produce and broadcast,” he said.
“For the last 16 years we’ve been following the same strategy, the combination of content and distribution … we will continue in this direction.”
Péladeau said Quebecor anticipated the growth in video and music streaming, pointing to its video service Club Illico and its mobile phone plans that offer unlimited music streaming.
The phone plans sparked a controversial regulatory hearing over whether companies should be able to offer unlimited data only for one type of content.
But Péladeau wouldn’t share details on plans for Videotron’s spectrum assets outside of Quebec amid widespread speculation that it will sell the airwaves to a player such as Shaw Communications Inc.’s Freedom Mobile.
Nor did executives release a roadmap for its Internet protocol TV plans, although Videotron CEO Manon Brouillette said it is discussing with vendors and will make an announcement shortly.
Brouillette also noted that Videotron posted its strongest annual growth in wireless subscribers in five years, increasing its subscriber base to 894,000 as of Dec. 31. About 30 per cent are on bring-yourown-device plans, she said, which brings down average revenue per user but bucked industry trends by lowering the cost of acquiring new subscribers.
“We think this phenomenon will increase in the future,” she said, pointing to Europe where subsidized phones are less common. “We believe that we have to be strong in attracting those subscribers because we’re the challenger here, we’re the alternative for those subscribers who were captive of the incumbent for many years.”