Tony Staffieri, the new chief executive officer of Rogers Communications Inc. RCI-A-T, has vowed to make the changes needed to improve the telecom and media giant’s performance as it seeks to close its $26-billion takeover of Shaw Communications Inc. SJR-A-X during the second quarter.
In his first public appearance since taking the helm after a tumultuous battle for control of Canada’s largest wireless carrier, Mr. Staffieri expressed dissatisfaction with the company’s lagging performance relative to its peers in recent years.
“We know we can do better, so we will continue to make the necessary changes,” Mr. Staffieri said on Thursday as Toronto-based Rogers reported higher revenue but a dip in profits during the fourth quarter of last year.
“We have the networks, services and a talented team. With a renewed focus on execution, I know we can achieve our full potential as a business,” he added.
Mr. Staffieri, who was the company’s chief financial officer for nearly a decade, was fired in late September when the majority of the company’s board opposed an attempt by chair Edward Rogers to give him the top job.
Mr. Rogers struck back by replacing five of the company’s independent directors without calling a shareholder meeting, triggering a legal battle that ended with the reconstituted board replacing the company’s then-CEO, Joe Natale, with Mr. Staffieri. Mr. Rogers had expressed concerns about the company’s stock price under Mr. Natale’s leadership.
During a conference call on Thursday to discuss the telecom’s most recent quarterly results, Mr. Staffieri said that growing the cable division, which reported flat year-over-year revenue and profit in that period, would allow Rogers to reap greater benefits from its purchase of Shaw.
“We’re really not happy with the performance of subscriber additions in the fourth quarter, and we think we can do better,” Mr. Staffieri said.
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Three regulatory bodies are reviewing the Shaw takeover, and the telecom’s new CEO said securing approvals from each of them is another one of his key priorities. Mr. Staffieri said the deal is on track to close during the second quarter.
Rogers reported $3.92-billion in revenue during the fourth quarter of 2021, up 6 per cent compared to a year ago. Analysts had expected revenue of $3.85-billion, according to the consensus estimate from S&P Capital IQ.
The revenue growth was driven by wireless subscriber additions and an increase in roaming revenues as travel restrictions related to the COVID-19 pandemic were looser compared to the previous year. Rogers added 141,000 net new postpaid mobile phone subscribers during the quarter, beating analyst expectations. (Postpaid customers are billed at the end of the month for the services they used, while prepaid customers pay upfront for wireless services.)
The media division also saw higher revenue, owing to the return of live sports broadcasting ads.
The telecom’s profit for the three-month period ended Dec. 31 came to $405-million, down 10 per cent from a year ago, when its fourth-quarter profit was $449-million. The earnings amounted to 80 cents per share, down from 89 cents per share during the same period last year.
After adjusting for items such as restructuring, acquisition and their income tax impact, the profit amounted to $486-million or 96 cents per share, down 3 per cent from a year ago and above the consensus estimate of 95 cents per share.
Rogers also issued an annual guidance for the first time since the start of the pandemic. The company said it expects to grow its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) by 6 per cent to 8 per cent and its total service revenue by 4 per cent to 6 per cent in 2022.
“While guidance is slightly below expectations, we see the return of annual guidance as positive,” Desjardins analyst Jérome Dubreuil said in a research note.
Rogers shares closed up 3.3 per cent, or $2.05, to $63.85 on the Toronto Stock Exchange.
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