-- Net wireline customer activations show strong year-over-year
-- High-speed Internet adds 11,600 net new customers, up 55 per
cent from Q3 2012
-- IPTV adds 14,500 net new customers, up 19 per cent from Q3 2012
-- Strong FibreOP(TM )growth continues
o FibreOP Internet adds 19,300 net new customers, up 17 per cent from
o FibreOP TV adds 16,300 net new customers, up 14 per cent from Q3
o Fibre-to-the-home (FTTH) footprint expands to 770,000 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, Oct. 31, 2013 /CNW/ - Bell Aliant Inc. (TSX: BA) today reported
financial results for the third quarter of 2013 for Bell Aliant Inc. (Bell
Aliant) and Bell Aliant Regional Communications Inc. (Bell Aliant GP).
"I am very pleased with our third quarter results," said Karen Sheriff,
president and chief executive officer, Bell Aliant. "We achieved very strong
net wireline customer activations, which is especially rewarding considering
the competitive environment in which we are operating.
"We added 11,600 net new high-speed Internet customers, up 55 per cent from
the same quarter in 2012. At the end of the third quarter of 2013, we have
already added more high-speed Internet customers than we did for the full year
2012. We also added 14,500 net new IPTV customers, increasing our IPTV
customer base by 52 per cent from the same time a year ago. Our third quarter
net NAS results declined only slightly from the third quarter of 2012,
significantly improving upon the year-over-year trend experienced in the
"The progress we are continuing to make with our fibre-to-the-home strategy is
a significant contributor to our improved customer activation results. We
continue to gain confidence that our FTTH strategy is the right one to return
us to growth.
"As we expected, our year-over-year financial performance in the third quarter
was somewhat softer than prior quarters of this year. Pricing activity that
occurred later in 2012 and expense recognition timing differences benefitted
the year-over-year comparisons of earlier quarters this year, without similar
benefits in the third quarter. Also, our response to aggressive competitive
activity in the third quarter, while helping to improve our customer
activation performance, caused our costs in the quarter to increase, and
thereby contributed to softer year-over-year financial performance in the
"While the competitive environment is fierce, I remain confident that FibreOP
offers the best value to customers in our FTTH markets. With our FTTH
penetration rates now at 22 per cent, and further FTTH footprint expansion to
800,000 premises expected by the end of this year, we believe we have great
opportunity for future growth. By continuing to build our customer base, our
goal is to expand our opportunities for returning to revenue growth, and our
performance this quarter solidly supported that objective."
"Our third quarter results and our solid performance in the first two quarters
of 2013 position us well to achieve our previously announced financial
guidance for fiscal 2013."
Third quarter 2013 highlights((1)( 2)(3))
Bell Aliant Inc. reported net earnings of $81 million for the third quarter of
2013, down $7 million from the third quarter of 2012, primarily as a result of
lower EBITDA in Bell Aliant GP. Earnings per share and adjusted earnings per
share were $0.35 and $0.42 respectively, each down $0.03 from the same quarter
Third quarter financial highlights of Bell Aliant GP are summarized as follows:
|(In millions of dollars) | | | | YTD | YTD | |
|(unaudited) |Q3 2013|Q3 2012|Change| | |Change|
| | | | |2013 |2012 | |
|Operating Revenue | $695 | $697 |(0.4%)|2,070|2,067| 0.2% |
|EBITDA | 327 | 335 |(2.2%)| 978 | 990 |(1.3%)|
|Capital Expenditures | 138 | 144 |(4.4%)| 423 | 458 |(7.6%)|
|Free Cash Flow | 145 | 113 |27.8% | 393 | 358 | 9.6% |
Operating revenues of $695 million in the third quarter of 2013 were down 0.4
per cent from the same quarter in 2012. Growth in TV, Internet, other data,
wireless and other revenues were offset by declines in local and long distance
Operating expenses of $368 million in the third quarter of 2013 grew 1.4 per
cent compared to the same quarter in 2012. The increase was largely due to
growth in TV content, marketing and customer support costs from a growing
FibreOP customer base, and the timing of management incentive accruals, which
were somewhat offset by expense reductions throughout the business.
As a result, EBITDA of $327 million in the third quarter of 2013 declined by
2.2 per cent compared to the same quarter in 2012.
Capital expenditures in the third quarter of 2013 were $138 million, down 4.4
per cent from the same quarter a year earlier, primarily due to lower central
Canada FibreOP startup costs and the completion of large FTTH transport
projects in 2012.
FTTH footprint expansion in the third quarter of 2013 was similar to the same
quarter of 2012. Bell Aliant passed an additional 45,000 premises with FTTH in
the third quarter of 2013 compared to 47,000 in the third quarter of 2012,
bringing total FTTH coverage to 770,000 premises at the end of September 2013.
Capital expenditure pressures arising from higher FibreOP customer connections
in the third quarter of 2013 compared to the same quarter in 2012, were offset
by improved installation efficiencies.
Free cash flow was $145 million in the third quarter of 2013, up $32 million
(27.8 per cent) from the same quarter a year earlier. The increase was
primarily due to changes in working capital and lower capital expenditures
compared to the third quarter of 2012, which were somewhat offset by lower
IPTV revenue grew $12 million (56.1 per cent) in the third quarter of 2013
compared to the third quarter of 2012, due to strong growth in IPTV customers
of 52.0 per cent from September 30, 2012. FibreOP TV added 16,300 net new
customers in the quarter to reach 142,100, a portion of which were migrations
from Bell Aliant's fibre-to-the-node (FTTN) TV service. Overall net IPTV
customer additions were 14,500 in the third quarter of 2013, compared to
12,300 a year earlier. Total IPTV customers reached 163,300 at the end of
Internet revenue increased $6 million (4.8 per cent) with residential
high-speed Internet average revenue per customer (ARPC) in the third quarter
of 2013 up 3.4 per cent from the same quarter a year earlier. The high-speed
Internet ARPC increase was a result of selected pricing action and customer
demand for higher bandwidth bundles and other services, offset by increased
promotional pricing. Growth in high-speed Internet customers of 3.4 per cent
from a year earlier also contributed to Internet revenue growth. FibreOP
Internet customer net additions in the quarter were 19,300, bringing total
FibreOP Internet customers to 166,000 at the end of September 2013. FibreOP
Internet additions include existing Bell Aliant customers migrating from DSL
and 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 11,600 in the third quarter of 2013, up from
7,500 in the same quarter of 2012, bringing total high-speed Internet
customers to 944,900 at the end of September 2013.
Local service and long distance revenues declined $17 million (5.6 per cent)
and $10 million (11.5 per cent), respectively, in the third quarter of 2013
compared to the same quarter in 2012, driven by NAS declines of 5.7 per cent.
Net NAS declines of 33,700 in the third quarter of 2013 were up 1,300 from the
same quarter in 2012, a result of competitive activity and technology
Wireless revenues were up $1 million (3.2 per cent) in the third quarter of
2013 compared to the same quarter in 2012, driven by 2.6 per cent customer
Other revenues were up $3 million (8.4 per cent) in the third quarter of 2013
compared to the same quarter in 2012, mainly as a result of increased custom
work for large customers.
Bell Aliant declared a quarterly dividend of $0.475 per common share, payable
on December 31, 2013, to shareholders of record at the close of business on
December 13, 2013.
Bell Aliant Preferred Equity Inc. declared a dividend on its Series A
Preferred Shares of $0.303125 per share, a dividend on its Series C Preferred
Shares of $0.284375 per share, and a dividend on its Series E Preferred Shares
of $0.265625 per share, each to be paid on December 31, 2013, to shareholders
of record at the close of business on December 13, 2013.
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 third quarter 2013 can
be found in Bell Aliant's third quarter 2013 supplementary financial
information package and Bell Aliant's and Bell Aliant GP's third 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 October 31,
2013, at noon (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 December 1, 2013. To access
the replay, dial 800-408-3053 or 905-694-9451 and enter the passcode 3670003#.
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 third 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
(3) Definitions of non-IFRS measures:
a. EBITDA: Bell Aliant defines EBITDA as operating revenue less operating expenses, which
means it represents operating income before depreciation and amortization expense, and
severance and other charges. Operating income is calculated before net finance costs,
other expense and income taxes are deducted.
b. Free cash flow: Bell Aliant defines free cash flow as cash from operating activities
less capital expenditures. Free cash flow includes the cash performance of Bell Aliant
and Bell Aliant GP on a combined basis.
c. Adjusted earnings per share (EPS): Bell Aliant defines adjusted EPS as diluted EPS of
Bell Aliant Inc. adjusted for the per share after-tax effect of purchase price
allocation amortization, severance and other charges, and debt redemption loss,
recorded by Bell Aliant GP. In Q2 2013, Bell Aliant revised its definition of adjusted
EPS to exclude the after-tax effect of severance and other charges, and debt redemption
loss in order to align with the reporting practices of peers. Adjusted EPS for 2012 has
been restated to be presented on a consistent basis to 2013.
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 third quarter of
2013 available at
and www.sedar.com .
This news release contains forward-looking statements concerning anticipated
future events, results, circumstances or expectations, in particular
statements concerning revenue growth, FibreOP customer growth and FTTH
expansion plans. Unless otherwise indicated, such forward-looking statements
describe management's expectations at October 31, 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.
Forward-looking statements made in this press release are based on a number of
assumptions Bell Aliant believed were reasonable on the date the
forward-looking statements were made. In Bell Aliant and Bell Aliant GP's
2012 annual MD&As, and as updated in their 2013 quarterly MD&As issued to
date, the principal assumptions that were made in the preparation of the
forward-looking statements related to Bell Aliant's expected financial and
operational performance in 2013 were outlined. These assumptions included
market, operational and financial assumptions and have not changed
significantly during Q3 2013.
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 first, second and third
quarter 2013 MD&As, as well as the "Risk Factors" sections of Bell Aliant and
Bell Aliant GP'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.
SOURCE Bell Aliant Inc.
Media Relations: Katie Burgess Toll-free: (855) 487-6198
Investor Relations: Zeda Redden Toll-free: (877) 487-5726
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