Quebecor Inc. saw its profit climb sharply in the last quarter, thanks to fluctuating interest rates that allowed the company to post large gains on previously issued options.
The Montreal-based company posted a profit of $72.9-million, up 52 per cent from a year ago. Revenue was $1-billion, up 7.4 per cent.
The bulk of the increase in profits - $71-million - wasn’t because of anything the company’s business segments did, however, but rather “due to a favourable change in the fair value of early settlement options caused by interest rate and credit premium valuations.”
The company said the rest of its profit came from a $27-million increase in operating income and $8.4-million in gains that came from restructuring its businesses.
The company’s telecom division saw revenue increase 10 per cent to $646-million. The division includes its cable television business, which saw gains thanks to rate increases and new high-definition television packages. Its average revenue per customer was $109.18, up 9.4 per cent from a year ago.
The company said it is beginning to “reap the fruit of our investments in various businesses over the past three years, as the large increases in operating income and cash flows in our telecommunications segment tend to indicate.”
“The excellent first quarter results mark a positive start to 2012, a year that should see a number of attractive projects that hold considerable promise for the corporation’s long-term development and profitability,” the company said in a statement.
The company’s media division saw revenue decrease in the quarter, down 2.9 per cent.
While its flyer printing business saw revenue increase 16 per cent on higher volumes, advertising revenues at its daily and weekly newspapers were down 5 per cent and 2.2 per cent respectively.
Revenues at its web portals, such as its Canoe.ca hub, dropped 27.9 per cent.