- Rogers Communications (TSX:RCI.A) has reported steady results for the first quarter of 2020, despite economic upsets brought on by COVID-19
- The company saw a 5 per cent drop in revenue compared to the same period last year
- As of March 31, the company had a strong balance sheet with $3.8 billion in total liquidity
- Quarterly dividends of $0.50 have also been declared, payable on July 2, 2020
- As a result of ongoing market uncertainty, the company has elected to withdraw its previously announced guidance for 2020
- Rogers Communications (RCI.A) is currently down 0.76 per cent to $60.00 per share, with a market cap of $28.92 billion
Rogers Communications (TSX:RCI.A) has reported steady results for the first quarter of 2020, despite the economic upsets brought on by COVID-19.
But, even with designation as an essential service, the communications and media company saw its fair share of interruptions.
Operationally, the majority of its retail stores were subject to forced closures, with many employees required to work from home. In its efforts to keep customers connected, Rogers also added additional services and waived certain fees.
As a result, the company posted a 5 per cent decline in total revenue to C$3.42 billion for the first three months of this year, compared to $3.59 billion for the same period in 2019.
The marginal drop was largely attributable to a 17 per cent decrease in Wireless equipment revenue stemming from lower subscriber activity, as well as a 3 per cent decline in total service revenue.
Media revenue also took a 12 per cent hit during the quarter, primarily due to lower advertising and sports revenue as a result of suspensions to major sport leagues in March.
However, Rogers’ cable revenue proved to be somewhat of a saving grace. Declines in other business areas were offset by increases in the company’s internet and Ignite TV subscriber bases.
Furthermore, Rogers reported a substantial movement of its internet customers to higher speed packages and usage tiers as many went into isolation.
In terms of liquidity, the company had $3.8 billion as of March 31. This is comprised of $1.8 billion in cash and cash equivalents, with an additional $1.8 billion under its bank credit facility.
However, with the economic climate still shrouded in uncertainty, Rogers has made the decision to withdraw its previously announced guidance for 2020. The company said that while it’s difficult to predict the overall effects on its operations and financial results, “the impact may be material.”
A revised outlook will be made available once clearer estimates can be made regarding revenue, EBITDA, capital expenditures and free cash flow.
Joe Natale, President and CEO of Rogers Communications, stressed that the company’s focus is on keeping its teams and customers safe, and keeping Canadians connected.
“We began to see the impact of COVID-19 in the final few weeks of Q1 and have quickly adapted our operations to continue delivering critical services to meet the evolving needs of our customers.
“Our strong balance sheet positions us well to manage through this crisis,” he said.
Separately, Rogers also announced today that it will issue dividends of $0.50 for every Class B Non-Voting and Class A Voting shares, payable on July 2, 2020.
Rogers Communication (RCI.A) is currently down 0.76 per cent to $60.00 per share at 19:56am EST.