Rogers’ Q4 financial results for 2021 reveal the carrier increased its overall revenue this year, but costs related to restructuring and the acquisition of Shaw decreased how much the company took home.
The company’s fourth-quarter revenue increased by six percent, at $3.92 billion compared to $3.6 billion in 2020.
The increase of wireless subscribers partially drove this. The quarter saw the addition of 141,000 new wireless subscribers. Revenue also came from roaming costs associated with lighter travel restrictions.
The company’s media portfolio helped with this number, specifically with the delayed starts to the 2020-2021 NHL and NBA seasons. Revenue from this sector increased by 26 percent for the quarter.
The same growth was not seen for cable, which remained stable. Rogers says this is because of an increase in the company’s internet and streaming services and a decline in legacy television and home phone subscribers.
However, overall profits were down. Once adjusted for restructuring, acquisition, and tax impact, the company recorded $486 million in profit, decreasing from the $500 million in profit seen in Q4 2020.
The increase in wireless subscribers translated to the company spending more on wireless services. $501 million was spent in Q4 2021, a 49 percent increase from $337 million spent in 2020. The company says this is a result of upgrading its wireless services and implementing 5G.
$101 million was also spent on restructuring and acquisition expenses, a 38 percent increase from Q4 2020. Included was paying Shaw $62 million for costs related to Rogers merging with the company. The remaining went towards severance that came with the restructuring.
The 38 percent increase is not surprising as the company went through a period of turmoil and staff turnover while replacing its former CEO Joe Natale with Tony Staffieri.
Documents state that Rogers’ merger with Shaw will close in the first half of 2022, likely in the second quarter. If not completed by March 15th (subject to extension), either company can terminate the agreement.
While an Alberta court approved the transaction last year, government bodies still need to provide approval, including the Competition Bureau, Innovation, Science and Economic Development (ISED), and the Canadian Radio-Television and Telecommunications Commission (CRTC).
If approval isn’t granted by March 15th, Rogers is obligated to pay Shaw $1.2 billion to reverse the termination fee. This cost will likely rise given Rogers is also responsible for paying other expenses related to the acquisition process.
Rogers says the review with ISED to approve the transfer of Shaw’s spectrum licenses is currently underway.
The review with the CRTC took place in late November 2020, and it’s not clear when a decision will be delivered. The CRTC’s hearing was the only public hearing on the matter.
Besides Rogers successfully acquiring Shaw and growing its business in Western Canada, it wants to improve its performance and execution. The telecom giant also intends to increase its investments in 5G and expand the network across Canada. Rogers hopes these moves contribute to revenue growing between four and six percent.