Nadir Mohamed, Rogers CEO, Stepping Down In January 2014 To Retire

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NADIR MOHAMED
Rogers CEO Nadir Mohamed is stepping down from his position. | CP

Rogers Communications Inc.'s investors have a double-dose of news to digest, strong financial results including a dividend increase and plans for its CEO to retire in a year.

Nadir Mohamed, who succeeded founder Ted Rogers as head of the Toronto-based telecom company in March 2009 after heading the important wireless division for several years, said he'll retire in January 2014.

"Nadir is a highly regarded executive who has delivered strong results and substantial value for more than a decade," said Alan Horn, chairman of Rogers board of directors.

"Thanks to his disciplined and strategic management approach we've strengthened our core business, solidified our financial position and set Rogers up for long-term success," Horn said in a statement.

Roger said neither Edward Rogers nor his sister Melinda Rogers will seek the position formerly held by their father and they will both be involved in the search process. Mohamed will also be engaged in the selection process.

Shortly after the unexpected late-night announcement, Rogers released better-than-expected financial results for the fourth quarter of 2012.

The company also announced annualized dividend rate increases of 10 per cent to $1.74 per share.

Rogers (TSX:RCI.B) said it had a record quarter for smartphone sales, an important driver for revenue in the company's wireless division — 69 per cent of its customers are using smarpthones.

"We delivered another balanced set of financial and subscriber results, which further build on a number of positive trends," Mohamed told a conference call Friday.

"The results overall clearly reflect the strength of our asset mix which positions us uniquely a Canada's largest wireless provider complemented by healthy broadband and media businesses."

Rogers said the quarter's revenue was $3.26 billion and adjusted earnings were 88 cents — beating estimates of $3.19 billion and 72 cents per share.

Adjusted net income was $455 million, up from $350 million a year earlier. Net income without adjustments was $529 million or $1.02 per share, up from $327 million or $61 cents per share in the fourth quarter of 2011.

Rogers had 58,000 net postpaid subscribers for the quarter versus 42,000 in the same quarter in 2011. These customers are generally on lucrative three-year contracts for iPhone, BlackBerry or Android smartphones.

By contrast, major competitors Bell (TSX:BCE) added almost 144,000 net postpaid customers in the fourth quarter and Telus (TSX:T) added 123,000.

Rogers said wireless data revenue in the quarter was $727 million, up 21 per cent from the same quarter in 2011.

Total operating revenue for cable, Internet and home phone businesses in the quarter was $852 million, up two per cent from $838 million in the fourth quarter of 2011.

Last week, Rogers had to remove some "high level'' financial information from one of its websites after it was accidentally posted there by an employee. A Rogers' spokeswoman has said the financial information, which included annual revenues, was not related to its fourth-quarter financial results.

The information was briefly posted and removed from the website of Rogers Ventures Partners, which invests in technology startups.

Rogers says the information also included the size and the scope of the Toronto telecom company. It included annual revenue in specific divisions of the company "rounded up to hundreds of millions of dollars.''

The company has told the Canadian Radio-television and Telecommunications Commission that a $50 cap on extra wireless data charges such as roaming fees would be too disruptive to cut off customers.

Under the CRTC's draft wireless code, wireless companies would have to suspend some services when a customer reaches either $50 in additional charges over and above what they pay for their monthly plan — though roaming fees, for example — or an amount each consumer would set.

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