Rogers Communications signage is pictured in Ottawa on Tuesday, July 12, 2022. THE CANADIAN PRESS/Sean Kilpatrick
TORONTO – Rogers Communications Inc. is listing its data centres for sale in an effort to raise a billion dollars as the company moves to pay off debt related to the Shaw merger, the company said.
“It’s true,” CFO Glenn Brandt told analysts on the company’s first-quarter earnings call on Wednesday. “We are looking at raising a billion dollars in asset sales, predominantly (from) real estate.”
He added the decision to sell the company’s enterprise data centres, which focus on third-party sales, will not affect its wireless services as they are managed separately. The company did not confirm how many of its 12 Canadian data centres would be sold.
While Rogers plans to divest some properties this year, Brandt said a slowdown in the real estate market could hamper their plans.
The push to sell real estate assets comes as Rogers reported reaching its target of $1 billion in savings after its takeover of Shaw Communications – 12 months ahead of schedule. Still, the company’s chief executive told analysts he’s on the hunt for more.
“Having hit the $1 billion of synergy savings doesn’t mean we’re taking our foot off the gas pedal in terms of continued efficiency improvements,” CEO Tony Staffieri said.
This April marks a year since Rogers’ $26-billion purchase of Shaw closed. Staffieri said he remains impressed with how the Shaw assets are adding to the company.
There are still some key integration projects that need to be completed alongside taking on opportunities with vendors – all improving efficiency, he told analysts.
He added Rogers is working on revenue synergies as it expands its footprint in the enterprise space with bundle packages, particularly in Western Canada.
The sale of its Cogeco stake and some U.S. bonds helped repay $5 billion of Shaw-related debt and lower its 2024 annual interest costs by about $100 million, he said.
Rogers reported a first-quarter profit of $256 million, or 46 cents per diluted share, down from $511 million a year ago or $1 per diluted share.
The company reported its wireless service revenue went up nine per cent in its latest quarter, compared to the same period last year, mainly because of an increase in the company’s mobile phone average monthly revenue per user.
Staffieri said a “real catalyst” for that increase has been consumers moving to the Rogers Premium brand, which is switching to its 5G network, with a $50 entry price.
The company’s mobile phone average monthly revenue per user was $58.06, up from $57.26 in the first quarter of last year.
Media revenue at Rogers amounted to $479 million, down from $505 million in the same quarter last year.
Rogers said the decline in media revenue was due to higher programming and production costs and higher Toronto Blue Jays expenses, including player payroll.
On an adjusted basis, Rogers says it earned 99 cents per diluted share in its latest quarter, down from $1.09 per diluted share in the same quarter last year.
This report by The Canadian Press was first published April 24, 2024.
Companies in this story: (TSX: RCI. B)
Note to readers: This is a corrected story. An earlier version referred to the wrong quarter in the headline.
