BCE Inc. BCE-T reported a 13.8-per-cent drop in its fourth-quarter profit, as higher interest expenses and a decline in the market value of its French-language TV properties weighed on results.
The company said adjusted earnings per share are expected to fall between 3 per cent and 7 per cent in 2023 in light of lower tax adjustments, higher depreciation and amortization expense and higher interest costs.
The Montreal-based telecom posted $567-million in profit for the three-month period ended Dec. 31, down from $658-million the previous year. Total operating revenue was $6.44-billion, a 3.7-per-cent increase compared with last year.
During a conference call to discuss the results, president and chief executive officer Mirko Bibic said the company had faced aggressive Black Friday deal offers from rivals as consumers returned to more in-person shopping.
“For the first time since 2019, more retail foot traffic and shopping activity was unrestricted and back to prepandemic levels of competition,” he said.
Meanwhile, economic pressures are hurting demand for television and radio ads across the sector. However, Mr. Bibic said BCE’s media division performed “better than expected, buoyed by FIFA World Cup viewership and ads, and the company’s streaming platform, Crave, where the subscriber base grew by a quarter over 2022.
BCE stock was down about 2.9 per cent and closed at $61.39 on the Toronto Stock Exchange Thursday.
Mr. Bibic said the company’s fibre-optic and 5G expansion has opened new opportunities for bundled offers and upgraded cell plans. Wireless revenue was up 7.7 per cent in the quarter, and the company added 122,621 net mobile phone customers, up 11.8 per cent from last year.
In 2022, Bell acquired two independent internet providers, EBOX and Distributel, providing further access to “value-conscious residential and small-and-medium business customers,” Mr. Bibic said.
Increased immigration and travel helped profits, with revenue from roaming up from last year as Canadians continue their return to international travel.
But the company said it’s mindful of recessionary headwinds it could face in 2023, as well as higher borrowing rates and costs to service its debt, along with higher depreciation and amortization expenses related to its continued network buildout.
Chief financial officer Glen LeBlanc told analysts that in 2022 the company had faced $44-million more in costs owing to inflation, as well as $43-million in storm-recovery costs, as opposed to $5-million or $10-million in a typical year.
Mr. Bibic said BCE is preparing for the potential of increased competition from rival Rogers Communications Inc. if its proposed takeover of Shaw Communications Inc. goes ahead.
“We have the room to compete on price if anyone wants to take us there,” Mr. Bibic said.