Rogers posts $188 million loss
Toronto, - A $198-million writedown in a bad investment led Rogers Communications Inc. to a more than tripling of its second-quarter loss, the company reported Thursday.
The media empire said it lost $188.8 million, or 96 cents per share, in the three months ended June 30, compared with a loss of $53.3 million, or 35 cents per share, in the year-earlier period.
The loss was largely due to a writedown of its investment in Cogeco Inc., the fourth largest cable company in Canada, whose shares have been down as profits decline at its cable subsidiary.
Rogers owns more than 10 per cent of Cogeco stock, which has been struggling as the company's earnings are hurt by increasing competition in the satellite TV sector.
Rogers acquired its share in Cogeco two years ago for more than $300 million with the intention of holding it for the long term.
Thursday's move comes after a review by Rogers determined that "the market value decline of the shares held represents an impairment that is other than temporary in the carrying value of the Cogeco Cable and Cogeco Inc. investments," the company said in a release.
Cogeco shares set a 52-week low this week of $11, though they closed up 25 cents at $11.25 Wednesday. They have fallen 38 per cent in the past six weeks and compare with a 52-week high of $28.
Excluding one-time charges, mainly the Cogeco writedown, the company lost $53.5 million, or 33 cents per share, compared to a loss of $49.0 million, or 33 cents per share, in the second quarter of the previous year.
Revenue increased to $1.08 billion, compared with $979.6 million in the year-earlier period. Operating profit grew to $288 million from $249 million.
For the six months ended June 30, the company had a loss of $286 million, or $1.49 a share, compared with a loss of $200 million, or $1.15 per share, for the first six months of 2001.
"I am pleased with our operating results for the second quarter during which we achieved both good sales and financial performance in all of our key divisions," said Ted Rogers, president and CEO, citing strong growth of new services and improvements at its publicly traded Rogers Wireless division.
Its Rogers Media division, which closed its acquisition of 13 strong radio properties during the quarter, benefited from a "recent realignment of its cost structure," Rogers said.
For the quarter, operating profits in the cable division rose 5.7 per cent to $136.1 million for the quarter, wireless income rose to $132.8 million from $102.7 million a year earlier and media profits were up slightly at $30.1 million from $28.1 million in the year-earlier period.
Rogers Wireless also reported Thursday that it had reversed a large loss with earnings of $733,000 for the three months ended June 30, thanks to growth in its customer base.
Rogers Wireless made zero cents per share for the period, compared to a loss of $26.1 million, or 16 cents per share, a year ago.
Revenues at Rogers Wireless were slightly up, to $481.7 million, from $438.7 million for the same period a year ago.
The number of wireless voice subscribers increased by 15.6 per cent from the second quarter of 2001, to about 3.1 million, the company said.
"We have been successful during the first half of 2002 in achieving our core objective of profitable growth," Nadir Mohamed, president and chief executive of Rogers Wireless, said in a statement. "This is the third consecutive quarter of double-digit operating profit growth."
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