“In the midst of COVID, we have made significant progress in advancing our strategic priorities in order to generate continued operational momentum in the short term and to emerge from the crisis in an even stronger competitive position.
BCE Inc. reported earlier Thursday that its net income attributable to common shareholders fell to $ 237 million for the three months ended June 30, from $ 761 million a year earlier.
That was 26 cents per share of net income, up from 85 cents per share in the second quarter of last year.
The decrease included a non-cash impairment charge of $ 452 million reflecting the present value of Bell Media’s television and radio assets.
Adjusted earnings per share, which excludes certain expenses, fell 32.3 percent to 63 cents year-over-year – below analyst estimates compiled by financial market data firm Refinitiv.
Revenue was also slightly lower than analysts’ estimate at $ 5.35 billion, down 9.1% from $ 5.89 billion a year earlier.
Analysts had estimated that BCE Inc. would have 69 cents per share in adjusted earnings with nearly $ 5.37 billion in revenue, according to Refinitiv.
Montreal-based BCE, owner of the largest telecommunications and media companies in Canada, does business under a wide range of brands including Bell, Bell Mobility, Virgin Mobile, Lucky Mobile, CTV, TSN and the retail chain at detail La Source.
Its national competitors in the wireless sector are Rogers Communications Inc. (owner of the Rogers, Fido and Chatr brands) and Telus (Telus, Koodo, Public Mobile).
On the wireless front, Bell and its listed competitors all say they faced serious challenges from COVID in March, April and May – when many parts of Canada restricted or closed retail outlets for limit the spread of COVID-19.
Store closures limited the ability of operators to sell new phones and services, but because the problem was so widespread, consumers generally did not switch providers either. This has resulted in record churn rates in many cases.
RBC Dominion Securities analyst Drew McReynolds said in a research note Thursday ahead of the BCE conference call that Bell’s wireless revenues and EBITDA (earnings before interest, taxes and other expenses) had fallen less than planned.
Canaccord Genuity analyst Aravinda Galappatthige noted that Bell’s wireless service revenues were down 6.3%, which was more than his estimate, but postpaid subscriber additions were ahead of schedule. estimates at 21,600.
For residential and commercial telecommunications services provided by fixed lines – including Internet, television and telephone – customer turnover has also been very low, although some customers have fallen behind in their payments. payments due to the economic impact of COVID.
BCE chief financial officer Glenn Leblanc told analysts on Thursday that the company’s COVID-related spending in the quarter included $ 36 million in bad debt provisions from customers.
The relocation of call center agents to work from home, the purchase of personal protective equipment, and the increase in sanitation and cleaning spending brought the total direct costs of COVID to $ 85 million, including provisions for additional bad debts, he said.
In addition to the reduction in BCE’s profit from its own operations, it received reduced income from its partial stake in Maple Leaf Sports and Entertainment (owner of the Toronto major league hockey and basketball teams).
Despite these declines, Leblanc said that BCE’s free cash flow – which is after current debt service – rose 50% from a year earlier to $ 1.6 billion, partly in due to reduced capital spending during the early stages of COVID.
“Construction activity has now grown significantly,” said Leblanc.