BCE profit jumps as it unveils 5G ambitions

Company to spend $1B to double the population covered by its network

BCE Inc. is launching what executives call the biggest investment program in the company’s history as it speeds up plans for its 5G and fibre networks.

The Bell parent company said Thursday it will spend at least $1 billion in addition to its normal capital spending over the next two years in a move to double the share of the Canadian population covered by its 5G wireless network.

The extra spending will be funded in part by the sale of data centres to Equinix. The spending will help it finish fibre networks in Montreal, Toronto and Winnipeg, executives said, adding fibre will extend in Hamilton and Toronto suburbs.

More services, such as wireless home internet, will also be launched in Atlantic Canada, Quebec, Manitoba and rural Ontario as part of the expansion, executives said on a conference call with analysts.

“This is the right strategic move at the right time for our customers and our company,” chief executive Mirko Bibic said in a conference call with financial analysts.

Last year, BCE spent $4.2 billion in capital expenses. The new plan calls for about $700 million in extra spending this year, on top of the company’s typical yearly capital expenditures of about $4 billion.

Next year, BCE said it will spend $300 million to $500 million more than the $4-billion average, for a total of $1 billion to $1.2 billion in extra spending over the next two years.

BCE also raised its dividend

Thursday as it reported its fourth-quarter profit rose compared with a year ago. The company says it will pay a quarterly dividend of 87.5 cents per share, up from 83.25 cents per share.

The increased payment to shareholders came as BCE reported a profit of $889 million attributable to common shareholders, or 98 cents per share. That compared with a profit attributable to common shareholders of $672 million, or 74 cents per share, in the fourth quarter of 2019.

On an adjusted basis, BCE says it earned 81 cents per share for the quarter, down from an adjusted profit of 86 cents per share a year earlier. Analysts on average had expected an adjusted profit of 76 cents per share, according to financial data firm Refinitiv. BCE’S overall operating revenue totalled $6.10 billion, down from $6.28 billion. The company said it expects revenue to grow two to five per cent in 2021.

Chief financial officer Glen Leblanc said residential wireline sales were a clear highlight of the quarter, helped by an increase in home internet customers.

Residential wireline sales increased 1.5 per cent, marking the best quarterly performance in the past two years.

BCE’S financial report came on the heels of job cuts at Bell Media. About 210 Bell Media or CTV employees were laid off in Toronto this week, a union said, after Bell said it would also make changes to its radio programming.

Still, the company told analysts that 2021 is a “transition year” toward a return to the company’s pre-pandemic financial levels.

“We’re managing costs very tightly,” Bibic said.