-- Operating revenues up $2 million driven by FibreOP(TM) growth
-- Best year-over-year EBITDA rate-of-change since 2009
-- Free cash flow up $15 million
-- FibreOP TV customer additions of 15,600 up 47 per cent from Q1
-- FibreOP Internet customer additions of 17,900 up 40 per cent
from Q1 2012
-- Fibre-to-the-home (FTTH) footprint expands to 679,000 premises
This news release contains forward-looking statements. For a description of
the related risk factors and assumptions please see the section entitled
"Forward-looking Information" later in this release.
HALIFAX, May 1, 2013 /CNW/ - Bell Aliant Inc. (TSX: BA) today reported
financial results for the first quarter of 2013 for Bell Aliant Inc. (Bell
Aliant) and Bell Aliant Regional Communications Inc. (Bell Aliant GP).
"Returning to revenue growth is a key milestone in our strategy and our first
quarter results have us off to a great start for 2013," said Karen Sheriff,
president and chief executive officer, Bell Aliant. "Successful execution of
the strategy we initially launched in 2009 has resulted in progressive
improvements throughout the business over the last four years that are now
turning the revenue trajectory positive, demonstrating that our plan is
"In the first quarter of 2013, we achieved our best quarterly year-over-year
EBITDA rate-of-change since Q4 2009. We did this despite a $4 million
regulatory charge taken in the quarter, most of which was a retroactive charge
for 2012. Expansion of our FTTH network and solid cost management continued to
drive our improving results. As I have said many times, revenue growth will
come first, and EBITDA growth will follow. I am very pleased to see these
improving trends coming to pass.
"We are approaching a level of critical mass with our FTTH footprint, with
substantial capacity to add more FibreOP customers to this world-class
network. The competitive environment is intense and we are prevailing by
offering customers in our FTTH markets the best Internet technology available
today and a premium IPTV service, giving us a competitive advantage that will
serve us well for years to come. FTTH, with all of its benefits, is the key to
our future success.
"While our results are improving, we have much in front of us that we still
need to achieve and must continue to execute. We have a solid plan and with
the results we have demonstrated to date, my confidence in our ability to
return Bell Aliant to profitable growth continues to build."
First quarter 2013 highlights(1)
Bell Aliant Inc. reported net earnings of $84 million for the first quarter of
2013, up $1 million from the first quarter of 2012. Earnings per share and
adjusted earnings per share were $0.36 and $0.43 respectively, consistent with
the first quarter of 2012.
First quarter financial highlights of Bell Aliant GP are summarized as follows:
|(In millions of dollars)|Q1 2013|Q1 2012|Change|
|(unaudited) | | | |
|Operating Revenue | $684 | $682 | 0.3% |
|EBITDA ((1)) | 324 | 325 |(0.5%)|
|Capital Expenditures | 128 | 137 |(6.2%)|
|Free Cash Flow ((1) ) | 95 | 80 |18.5% |
((1) ) EBITDA, free cash flow and adjusted earnings per share are
non-IFRS financial measures. Refer to the "Non-IFRS financial
measures" section of Bell Aliant GP's Q1 2013 Management's
Discussion and Analysis (MD&A) for details.
Operating revenues of $684 million in the first quarter of 2013 grew by $2
million (0.3 per cent) from the same quarter in 2012. Growth in TV, Internet,
wireless, and other revenues offset declines in local and long distance
Excluding the effects of a retroactive regulatory adjustment in the first
quarter of 2013, operating expenses in the first quarter of 2013 were flat to
the same quarter in 2012. TV content and customer support cost pressures from
a growing FibreOP customer base were offset by expense reductions throughout
the business, largely driven by productivity savings.
EBITDA in the first quarter of 2013 included a $4 million largely retroactive
charge arising from a CRTC decision affecting wholesale Internet rates. EBITDA
declined by 0.5 per cent in the first quarter of 2013 compared to the same
quarter in 2012.
Capital expenditures in the first quarter of 2013 were $128 million, down $9
million (6.2 per cent) from the same quarter a year earlier. Higher FibreOP
customer connection costs were more than offset by lower FTTH footprint
expansion, reduced central Canada FibreOP startup costs, and lower legacy
capital expenditures compared to the first quarter of 2012.
Bell Aliant passed an additional 23,000 premises with FTTH in the first
quarter of 2013, compared to 58,000 incremental premises in the first quarter
of 2012. Total FTTH coverage reached more than 679,000 premises at the end of
March 2013. Approximately 5,000 more customer premises were connected to Bell
Aliant's FTTH network in the first quarter of 2013 compared to the same
quarter in 2012. FibreOP penetration of premises passed reached 19.6 per cent
at the end of March 2013.
Free cash flow was $95 million in the first quarter of 2013, up $15 million
(18.5 per cent) from the same quarter a year earlier. The increase was
primarily a result of lower capital expenditures, lower restructuring
payments, and higher cash from other operating activities compared to the
first quarter of 2012.
Total data revenue including Internet and TV increased $19 million (8.0 per
cent) in the first quarter of 2013 compared to the same period in 2012.
Internet revenue increased $8 million (6.4 per cent) with residential
high-speed average revenue per customer (ARPC) in the first quarter of 2013,
up 6.0 per cent from the same quarter a year earlier. The ARPC increase was a
result of selected pricing action and customer demand for higher bandwidth
bundles and other services. Growth in high-speed Internet customers of 2.8 per
cent from a year earlier also contributed to Internet revenue growth. FibreOP
Internet customers grew by 17,900, bringing total FibreOP Internet customers
to 130,100 at the end of March 2013. FibreOP Internet additions include
existing Bell Aliant customers migrating from DSL and fibre-to-the-node (FTTN)
networks to the upgraded service. These migrations do not contribute to
overall high-speed customer growth but increasingly contribute to improved
customer retention and growth in overall customer ARPC. Overall net high-speed
Internet customer additions were 8,700 in the first quarter of 2013, up from
6,400 in the same quarter of 2012, bringing total high-speed Internet
customers to 927,100 at the end of March 2013.
IPTV revenue grew $11 million in the first quarter of 2013 compared to the
first quarter of 2012 with total IPTV customers of 137,300 at the end of March
2013. FibreOP TV customers grew by 15,600 in the quarter to reach 112,500, a
portion of which were migrations from Bell Aliant's FTTN TV service. Overall
net IPTV customer additions were 14,300 in the first quarter of 2013, compared
to 7,900 a year earlier.
Local service and long distance revenues declined $14 million (4.9 per cent)
and $9 million (10.0 per cent), respectively, in the first quarter of 2013
compared to the same quarter in 2012, driven by NAS declines of 5.2 per cent.
Residential net NAS declines of 26,200 in the first quarter of 2013 were on
par with the same quarter in 2012. Improved residential customer activations,
winbacks and retention in FibreOP markets, and expansion into new markets
helped to mitigate declines arising from intense competitive activity
throughout our markets. Business net NAS declines of 5,900 improved by 2,700
from the same quarter a year earlier, mainly as a result of expansion into new
Wireless revenues were up $2 million (6.1 per cent) in the first quarter of
2013 compared to the same quarter in 2012, driven by 4.2 per cent customer
growth and 1.4 per cent wireless ARPC growth compared to a year ago.
Other revenues were up $4 million (11.1 per cent) in the first quarter of 2013
compared to the same quarter in 2012, mainly as a result of higher pole
attachment fees and custom work.
Bell Aliant declared a quarterly dividend of $0.475 per common share, payable
on June 28, 2013, to shareholders of record at the close of business on June
Bell Aliant Preferred Equity Inc. declared a dividend on its Series A
Preferred Shares of $0.303125 per share and a dividend on its Series C
Preferred Shares of $0.284375 per share, each to be paid on June 28, 2013, to
shareholders of record at the close of business on June 14, 2013.
Bell Aliant Preferred Equity Inc. also declared the first dividend on its
Series E Preferred Shares of $0.3959 per share to be paid on June 28, 2013, to
shareholders of record at the close of business on June 14, 2013. The initial
dividend covers the period from February 15, 2013, to June 30, 2013. Future
Series E preferred dividends are expected to be $0.265625 quarterly or $1.0625
annually, until the end of the initial rate reset period on September 30, 2018.
Unless otherwise stated, dividends paid by Bell Aliant and Bell Aliant
Preferred Equity Inc. to Canadian residents are "eligible dividends" as
defined by the Canadian Income Tax Act and corresponding provincial
More information on Bell Aliant's and Bell Aliant GP's first quarter 2013 can
be found in Bell Aliant's first quarter 2013 supplementary information package
and Bell Aliant Inc. and Bell Aliant GP's first quarter 2013 MD&As, available
at www.bellaliant.ca/investors and on SEDAR at www.sedar.com.
Analyst conference call
A conference call with the financial community is scheduled for May 1, 2013,
at 4:30 p.m. (Eastern). The dial-in numbers are 866-226-1792 and 416-340-2216
for Toronto area participants. Media are invited to attend in listen-only
mode. A replay of the session can be heard until June 1, 2013. To access the
replay, dial 800-408-3053 or 905-694-9451 and enter the passcode 3266319#.
A live audio webcast of the conference call can be accessed on
www.bellaliant.ca under the Investor Relations section. A replay of the
conference call will be available on the website for one year.
The information contained in this news release is unaudited.
(1) Bell Aliant derives virtually all of its income from its ownership
in Bell Aliant GP. Bell Aliant GP's results consolidate the results
of Bell Aliant Regional Communications, Limited Partnership,
Télébec, Limited Partnership, NorthernTel, Limited Partnership, and
Bell Aliant Preferred Equity Inc.
(2) Percentage changes quoted in this release related to dollar values
are based on amounts rounded to the nearest hundred-thousand,
consistent with disclosure in Bell Aliant's supplementary
information package and Bell Aliant GP's MD&A for the first quarter
of 2013. Dollar values quoted in this release are rounded to the
nearest million unless otherwise stated. Customer metrics are
rounded to the nearest hundred unless otherwise stated.
(3) Definitions of non-IFRS measures:
a. EBITDA: Bell Aliant defines EBITDA as operating revenue less
operating expenses before interest, income taxes, depreciation
and amortization expense, and severance and other charges.
b. Free cash flow: Bell Aliant defines free cash flow as cash
generated from operating activities less capital expenditures.
Free cash flow includes the operations of Bell Aliant and Bell
Aliant GP on a combined basis.
c. Adjusted earnings per share: Bell Aliant defines adjusted
earnings per share as fully diluted earnings per share of Bell
Aliant Inc. adjusted for the per share effect of purchase
price allocation amortization (PPA) net of income taxes.
For a reconciliation of these non-IFRS financial measures to the most closely
comparable IFRS financial measures, please refer to Bell Aliant GP's MD&A for
the first quarter of 2013 available at www.bellaliant.ca/investors and
This news release contains forward-looking statements concerning anticipated
future events, results, circumstances or expectations, in particular
statements concerning revenue and EBITDA growth, FTTH expansion plans, and
future preferred dividend payments. Unless otherwise indicated, such
forward-looking statements describe management's expectations at May 1, 2013.
These statements are based on management's beliefs regarding future events,
many of which, by their nature are inherently uncertain and beyond
management's control. These statements are not guarantees of future
performance and are subject to assumptions which may prove to be inaccurate
and numerous risks and uncertainties which are difficult to predict.
Bell Aliant encourages investors to review the risk factors section below, and
related disclosures, for a discussion of the various factors that could cause
actual results to differ from what is currently expected.
There are many factors that could cause results or events to differ materially
from current expectations. The most significant factors that Bell Aliant has
identified that may affect Bell Aliant's results or events in 2013 include but
are not limited to: increasing competition; cost management; financing and
free cash flow; network evolution; pension valuation and investment risk;
legislative and regulatory factors; outsourcing and vendor relationships;
information technology (IT); human capital; as well as the structural
subordination of our common shares; limitations on non-resident ownership;
dilution, unpredictability and volatility of our share price; and tax related
risks. Some of these risk factors are largely beyond Bell Aliant's control.
For additional information on material factors and assumptions used to develop
forward-looking information and risk factors that could cause actual results
to differ materially from forward-looking information, see also the "Risks
that could affect our business results" section of Bell Aliant Inc.'s MD&A for
the year ended December 31, 2012, and the "Assumptions made in the preparation
of forward-looking information" and "Risks that could affect our business and
results" sections of Bell Aliant Regional Communications Inc.'s MD&A for the
year ended December 31, 2012, as updated by their 2013 first quarter MD&As, as
well as the "Risk Factors" sections of Bell Aliant Inc.'s and Bell Aliant
Regional Communication Inc.'s 2012 Annual Information Forms. These documents
are available at www.bellaliant.ca/investors and www.sedar.com.
Should any risk factor affect Bell Aliant in an unexpected manner, or should
assumptions underlying the forward-looking statements prove incorrect, the
actual results or events may differ materially from the results or events
predicted. Unless otherwise indicated, forward-looking information does not
take into account the effect that transactions, or non-recurring or other
special items, announced or occurring after this information is provided may
have on the business. All of the forward-looking information reflected in this
press release and the documents referred to within it are qualified by these
cautionary statements. There can be no assurance that the results or
developments anticipated by Bell Aliant will be realized or, even if
substantially realized, that they will have the expected consequences for Bell
Except as may be required by Canadian securities laws, Bell Aliant disclaims
any intention and assumes no obligation to update or revise any
forward-looking information, even if new information becomes available, as a
result of future events or for any other reason. Readers should not place
undue reliance on any forward-looking information. Forward-looking information
is provided for the purpose of providing information about management's
current expectations and plans relating to fiscal 2013 or other future
periods. Readers are cautioned that such information may not be appropriate
for other purposes.
About Bell Aliant
Bell Aliant (TSX: BA) is one of North America's largest regional
communications providers and the first company in Canada to cover an entire
city with FTTH technology with its FibreOP services. Through its operating
entities it serves customers in six Canadian provinces with innovative
information, communication and technology services including voice, data,
Internet, video and value-added business solutions. Bell Aliant's employees
deliver the highest quality customer service, choice and convenience.
Media Relations: Sarah Levy MacLeod (855) 487-5026 firstname.lastname@example.org
Investor Relations: Zeda Redden (877) 487-5726 email@example.com
SOURCE: BELL ALIANT INC.
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