Montreal-based national carrier BCE Inc. (BCE.TO) reported $294 million net income, or 26 cents per share, in Q2 2020, a 64 per cent year-over-year decline, primarily attributable to $452 million in impairment charges related to the carrier’s television and radio properties.
BCE indicated these impairment charges include $291 million allocated to broadcast licences, $146 million to program and feature film rights, and $15 million to network and infrastructure and equipment.
“We identified indicators of impairment for [certain] Bell Media TV services and radio markets, notably declines in advertising revenues, lower subscriber revenues and overall increases in discount rates resulting from the economic impact of the COVID-19 pandemic,” the carrier’s shareholder report said.
In Q2 2019 the carrier reported $817 million in net income, or 85 cents per share.
BCE reported $5.35 billion in operating revenue, a 9.1 per cent decline, compared to the $5.89 billion it reported in the same period a year ago.
The carrier’s earnings report released on August 6, indicated it added over 34,000 new wireless subscribers, a steep decline from the more than 149,000 it added in the same period a year ago. The increase in wireless subscribers included over 21,000 monthly paid subscribers.
“Overall market activity was affected by retail channel closures and fewer promotional offers due to COVID-19, resulting in a 35.2 per cent decline in Q2 postpaid gross additions,” the report said.
The carrier’s churn rate, or the measure of subscribers who deactivated services, was reported at 0.82 per cent.
Average Billing Per User decreased by 8.8 per cent to $62.77, mainly a result of a “decline in roaming, data overage and other fee revenue due to COVID-19, as well as the dilutive impact from continued prepaid customer growth.”
Operating revenue for Bell Media decreased 31.2 per cent to $579 million due to lower year-over-year advertising and subscriber revenue.
The carrier said Crave TV, its online streaming service, now has 2.8 million subscribers, a slight increase from the 2.7 million it had in the previous quarter.
“Q2 was a tough quarter for Bell Media on a relative basis. It was our most significant impacted operating segment, but it also represented the smallest part of BCE’s revenue,” Glen LeBlanc, BCE’s CFO, said during the earnings call.
“We experienced a steep decline in advertising demand this quarter due to the impact of COVID-19, add spending across all platforms was down as commercial activity was significantly curtailed, major sports leagues suspended and other live events and TV productions cancelled because of this crisis.”