On the eve of the release of Rogers Communications Inc. financial results for 2012, company CEO Nadir Mohamed
surprised the business world by announcing he will retire in 12 months.
The announcement was made late Thursday in a news release. Rogers, a $12 billion communications and sports conglomerate, was scheduled to release its fourth quarter and full year results Friday morning.
Mohamed, 55, was appointed CEO in August, 2009, following the death of company founder Ted Rogers.
Before that he had been president and COO of Rogers Communications after being president of Rogers Wireless from 2001 to 2005.
"Nadir is a highly regarded executive who has delivered strong results and substantial value for more than a decade," Alan Horn, chairman of the Rogers board said in a statement.
"Thanks to his disciplined and strategic management approach we've strengthened our core business, solidified our financial position and set Rogers [TSX: RCI.A] up for long-term success. The board is grateful for his significant contributions and looks forward to working with him to ensure a seamless and orderly transition.
The statement also said that neither of Ted Rogers' children and significant shareholders –Edward, who is deputy chairman and executive vice-president of corporate development; and Melinda, who is senior vice-president of strategy and development – will apply to be CEO.
In the statement Mohamed didn’t explain why he’s leaving. In Friday morning's conference call with financial analysts going over the Q4 results, he mentioned that he has been in the telecom industry for 30 years, 10 with Rogers.
"The company's in great shape right now," he said, "and I belive it's the right time to start the transition to the next generation of leadership," he told analysts.
Mohamed can look back at a string of successes after he took over as CEO. Rogers is still the nation’s biggest wireless carrier -- it ended 2012 with 9.4 million subscribers -- and expanded its cable and broadcast holdings. Under his reign the company expanded its presence in sports by partnering with rival Bell Canada to buy the partent company of NHL's Toronto Maple Leafs and NBA's Toronto Raptors, and a few months ago opened the bank account to pay for big-name players for baseball's Toronto Blue Jays. Combined with the acquistion of a sports channel Rogers has lots of content for its cable and wireless subscribers.
With Mohamed at the helm, Rogers was the first of the carriers to launch a next-generation LTE wireless network. He told analysts that the company now has close to 1 million LTE subscribers. Most of them have smart phones that pull in revenue-generating data.
The cable Internet service now offers broadband download speeds of up to 150 Megabits a second to over 90 per cent of subscribers, he told analysts.
He has also directed the company to focus on the machine-to-machine (M2M) Internet business, which includes things like smart home and business electric meters. Mohamed told analysts that Rogers now has 800,000 connected devices, up 27 per cent from 2011.
Rogers Business Solutions, which offers services to small and mid-sized companies, saw a 26 per cent increase in revenue in the fourth quarter. For the first time half of its revenue comes from customers on Rogers' cable or fibre optic network rather than the older circuit networks the company is trying to retire.
As for the most recent quarterly results, the company chalked up net income of $455 million in the fourth quarter on revenue of $3.2 billion. For 2012, Rogers had net income of $1.7 billion on revenue of $12.4 billion.
Consolidated adjusted operating fourth quarter profit for the company – which includes wireless, cable, broadcasting, publishing divisions as well as sports franchises – was up 7 per cent compared to Q4 2011. That was made up of a 3 per cent increase in wireless profit, 4 per cent in cable, 35 per cent in the business services division and 70 per cent in the media division (this last helped in part by lower programming costs thanks to the NHL lockout).
In the fourth quarter the wireless division activated or upgraded 940,000 smartphones, compared to approximately 791,000 in Q4 2011. "This is the highest number of smartphone activations and upgrades in any quarter in Rogers' history," the company said.
Lost in the Mohamed announcement was the release of Telus Corp.'s fourth quarter results. The Vancouver-based telecom said fourth quarter 2012 revenue increased 6 per cent to $2.85 billion. Consolidated revenue growth was generated by an 8 per cent increase in wireless revenue.