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Profit falls 68.9 per cent at Bell parent company amid pandemic

BCE profits plunge

The parent of Bell Canada reported Thursday second-quarter profits down nearly 70 per cent from the same period last year due to the pandemic's impact on economic activity and customer demand, but said it is overall well-positioned to withstand the headwinds.

Amid widespread closures that kept many of Canada's employees and children at home, Bell added 50,121 wireless, residential internet and IPTV customers during the quarter, though expenses also rose.

Its media division, which includes the CTV television network and Canada's largest collection of radio stations, also suffered from reduced advertising revenue as most professional sports suspended activity and many businesses cut ad spending.

Mirko Bibic, president and CEO of Bell and its parent BCE Inc. told analysts that the companies have generated substantial cash flow with no near-term debt payments — giving it the financial flexibility to maintain its dividend and capital spending.

"Although we don't expect to return to pre-COVID operating performance in the near term, Q3 is anticipated to show a marked improvement. We remain very confident in the underlying long-term fundamentals and performance of BCE," Bibic said in a quarterly conference call.

BCE Inc. reported earlier that its net income attributable to common shareholders dropped to $237 million for the three months ended June 30, from $761 million a year earlier.

That amounted to 26 cents per share of net earnings, down from 85 cents per share in last year's second quarter.

Adjusted earnings per share were down, falling 32.3 per cent to 63 cents year-over-year — below analyst estimates.

Revenue was also slightly below analyst estimates at $5.35 billion, down 9.1 per cent from $5.89 billion a year earlier.

Analysts had estimated BCE Inc. would have 69 cents per share of adjusted earnings with nearly $5.37 billion of revenue, according to financial markets data firm Refinitiv.

Analyst Drew McReynolds of RBC Dominion Securities said in a research note ahead of the conference call that Bell's wireless revenue and EBITDA (earnings before interest, taxes and other expenses) were down less than he expected.

Canaccord Genuity analyst Aravinda Galappatthige noted Bell's wireless service revenue were down 6.3 per cent, which was more than his estimate, but post-paid subscriber additions were ahead of estimates at 21,600.

Besides its Bell Mobility premium brand, the company offers Virgin Mobile and Lucky Mobile.



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