BCE Inc. has reported its financial results for the fourth quarter and full year of 2024, highlighting both challenges and achievements during the year. The telecommunications giant revealed operating revenues of $6.42 billion for Q4, reflecting a 0.8% decrease compared to the same period last year. For the entire year, revenues also fell by 1.1%, totalling $24.41 billion, down from $24.67 billion.
The decline can be partially attributed to reduced service revenues from its Bell Communications and Technology Services (CTS) segment, though Bell Media showed modest growth with revenue up by 1.2% during the fourth quarter. Specifically, Bell CTS revenues fell 1.1% to $5.68 billion, and service revenues contracted by 1.6% year-over-year due to weakness seen in legacy voice and data services.
One notable aspect of BCE’s Q4 results is the significant drop in postpaid mobile phone net activations, which fell to 56,550 from 128,715 last year. This decline reflects tough competition within the telecommunications market, affecting subscriber growth rates, though BCE reported improved performance for its prepaid service line as losses reduced considerably thanks to expanded retail distribution channels.
BCE's fourth quarter earnings painted a mixed picture. Net earnings surged by 16.1% to $505 million or $0.51 per share, benefiting from lower impairment charges associated with Bell Media's traditional TV and radio properties. Conversely, full-year net earnings declined 83.9% to $375 million, primarily due to non-cash asset impairment charges of $2.19 billion.
Despite pressures on the revenue front, BCE saw adjustments yield improved adjusted net earnings, which climbed by 4.1% year-over-year to $719 million. Nevertheless, annual adjusted net earnings dipped by 5.2% to $2.77 billion. Reflecting on the overall results, BCE’s adjusted EBITDA margin reached its highest level in over three decades at 43.4% for the full year, highlighting some efficiency gains.
CEO Mirko Bibic elaborated on the company’s performance during the earnings call, stating, "It's been a highly competitive environment, with the lowest pricing we’ve ever seen." He acknowledged the effects of market shifts, competitive pressures, and challenges related to macroeconomic conditions. The company is projecting earnings per share for 2025 to possibly decline between 8% and 13%, attributing this to competition and market pressures.
Looking toward the future, BCE forecasts revenue growth options ranging between a decline of 3% and growth of 1%. Adjusted EBITDA could also experience fluctuations, with possible declines of 2% or increases up to 2%. The company aims to tighten its capital expenditure, reducing it to around 14% of revenue to practice healthy cash management—a significant change from the 16.0% observed this year.
Management is hopeful for free cash flow momentum, predicting it could increase by 11% to 19% after experiencing an 8.1% decline during 2024. These predictions omit potential impacts from pending ventures, including the anticipated divestiture of Northwestel and the acquisition of Ziply Fiber expected to close by the second half of 2025.
Despite the hurdles, BCE's Board has declared its commitment to maintain its annualized dividend at $3.99 per share for 2025, signaling confidence among shareholders even as some analysts speculate on the sustainability of such payouts. Bibic communicated the company’s long-term vision, expressing optimism about BCE’s capacity to navigate the competitive telecommunications environment by focusing on advances like 5G infrastructure and digital transformation.
Through calculated steps, BCE aims to strategically position itself for sustainable growth, improving operational efficiencies, and adapting to shifts within consumer behavior alongside competitive dynamics. The financial guidance and strategic outlook reflect BCE's overarching goal of driving value and performance amid shifting market conditions.