The chief executive of communications company Quebecor Inc. (TSX: QBR.B) blamed the Montreal Canadiens hockey team’s failure to make the playoffs this spring for a damaging drop in advertising revenues during the second quarter.
The criticism of the Montreal Canadiens came even though Quebecor earned $1.04 billion in overall revenue during the quarter. The Montreal-based communications company’s second-quarter results, in which revenue edged up 0.5% from the same time last year, came primarily from growth at its telecommunications arm as revenue at its media business dropped 6%.
"The results of our media operations were heavily impacted by TVA Sports, which … suffered from the absence of the Montreal Canadiens in the NHL playoffs," Pierre Karl Peladeau said on a conference call with investors Thursday.
With playoffs spanning the bulk of the quarter, advertising revenue from the TVA Sports specialty channel plunged 36% from the year-earlier period, when the 101-year-old team made the first playoff round, said TVA Group CEO France Lauzière.
Growth at Quebecor’s Videotron cable, internet and wireless business boosted revenue from telecommunications to $847.2 million, from $826.6 million last year. Quebecor had $41.3 million of net income attributable to shareholders in the second quarter, amounting to 18 cents per share.
That was down from $137.8 million or 57 cents per share in the second quarter of 2017, when Quebecor’s profit was boosted by a gain from the sale of a spectrum licence. Adjusted income from continuing operating activities, which excludes the spectrum sale and other items, was $106.2 million or 45 cents per share, up from $88.6 million or 37 cents per Quebecor share.
Peladeau said the company had achieved a major milestone in the second quarter when it became 100% owner of Quebecor Media after buying out its strategic partner — the Caisse de depot.
"With access to all the cash flows generated by the subsidiary, the corporation will now be better equipped to seize business opportunities as they arise, to achieve its objectives with respect to its dividend payment policy, and to take full control of its development projects," Peladeau said Thursday.
Earlier this week, Peladeau said in a Facebook posting that Quebecor’s ability to do business with the Quebec government was jeopardized because he had pleaded guilty on July 10 to violating the province’s election act by personally reimbursing a $137,000 debt accumulated by his campaign to become leader of the Parti Quebecois.
However, Peladeau’s Monday social media posting said the province’s treasury board and premier have the power to declare an exception to the act’s automatic penalties and a Quebecor statement on Tuesday said it was confident “that the matter will be settled in the near future without restricting the corporation’s activities or its public sector clients."
