Rogers navigating federal immigration policies, tariff threat as profits rise

Staffieri told analysts on a conference call that Rogers’ 2025 outlook includes continued service revenue growth, but its wireless business would likely “continue to be impacted by the number of newcomers to Canada.”

Last fall, the federal government announced it was slashing immigration targets. It now expects to bring in 395,000 permanent residents this year and 380,000 in 2026, both down from a previous forecast of 500,000.

Ottawa also previously capped international student visas for both 2024 and 2025.

Staffieri said Rogers is already feeling the effect of those policy changes, with fewer newcomers to Canada signing up for its services.

Its net increase in postpaid mobile phone subscribers totalled 69,000 for the fourth quarter of 2024, down sharply from 184,000 net additions recorded the same period last year. Combined with net prepaid additions, the company had 95,000 new mobile phone subscribers.

“While this is down year-on-year, this was due to a much smaller market size as a result of government policies to reduce the ‘new-to-Canada’ category,” said Staffieri.

Asked whether Rogers’ subscriber adds could be affected further if the Conservatives win the upcoming federal election and subsequently implement tighter immigration policies, Staffieri said the company is staying “prudent.”

“It’s too difficult and speculative to try to guess if and when there is a new government and what their take and policies might be and how fast they implement,” he said.

“If there is upside, then great. It’s good for the industry and good for Rogers, but we’ve taken a prudent approach based on what we have in front of us now.”

The company said it’s readying for other potential challenges, including U.S. President Donald Trump’s threat of tariffs on Canadian goods, although Staffieri didn’t elaborate on how detrimental a trade war might be to Rogers or the telecom and media sectors.

“We think about, and have thought about, some of the broader macroeconomic factors that could impact us, including some of the recent discussions around tariffs with our U.S. neighbour,” he said.

Rogers’ fourth quarter profit amounted to $1.02 per diluted share, up from 62 cents per diluted share in the last three months of 2023. Revenue totalled $5.5 billion, up from $5.3 billion a year earlier.

Media revenue rose 10 per cent to $616 million, primarily as a result of higher sports- and entertainment-related revenue. While that was lower than the company expected, Desjardins analyst Jerome Dubreuil said in a note it beat consensus estimates of $577 million.

Rogers said credit for the increase partially belongs to Taylor Swift’s six Eras Tour concerts in Toronto, which she performed in November at Rogers Centre.

“Thanks, Swifties,” Dubreuil wrote.

Shares in the company traded for $41.98 as of midday Thursday, up 52 cents or 1.3 per cent.

On an adjusted basis, Rogers said it earned $1.46 per diluted share in its latest quarter, up from an adjusted profit of $1.19 per diluted share. Analysts on average had expected a profit of $1.36 per share, according to LSEG Data & Analytics.

Rogers’ monthly churn for net postpaid mobile subscribers — a measure of those who cancelled their service — was 1.53 per cent, down from 1.67 per cent during its previous fourth quarter.

Meanwhile, Rogers’ mobile phone average monthly revenue per user was $58.04, up from $57.96 in the fourth quarter of the prior year.

Scotiabank analyst Maher Yaghi said effective cost reductions shielded the company’s bottom line despite the slowdown in wireless customer additions.

However, he said investors are keen to find out more about two pending transactions that have yet to close: Rogers’ $4.7-billion deal to acquire rival BCE Inc.’s 37.5 per cent stake in Maple Leaf Sports & Entertainment, along with its own $7 billion sale of a minority stake in a portion of its wireless network infrastructure.

The latter deal with an undisclosed “leading global financial investor” was announced last October as a way to help Rogers pay down debt.

Although it had initially said it expected the sale to close during the fourth quarter, Staffieri said Rogers continues to “work on definitive agreements” and would provide an update at a later time.

Yaghi said certainty on the deal’s closure will be key “given the funding requirement for MLSE.”

“This uncertainty, while possibly transitory, is weighting on the stock and until this is dealt with it will be difficult for the stock to pick up momentum,” he said.

The deal with Bell, which will give Rogers a 75 per cent interest in the sports ownership giant, is expected to close sometime this year.

Staffieri said Rogers is awaiting approvals from the relevant sports leagues and the CRTC, after receiving its first regulatory green light from the Competition Bureau last month.

This report by The Canadian Press was first published Jan. 30, 2025.

Companies in this story: (TSX:RCI.B)

Sammy Hudes, The Canadian Press

by Canadian Press

Rogers navigating federal immigration policies, tariff threat as profits rise

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