Quebecor Reports Q3 Results: Earnings Per Share Grows 12%
Press release from the issuing company
MONTREAL--Oct. 28, 2002--Quebecor World Inc. today announced earnings per share for the third quarter 2002 of $0.64, which represents a 12% growth on a comparable basis to the same quarter last year. Net income for the quarter rose to $99 million and despite a continuing challenging global economic environment the Company generated $97 million of free cash flow in the quarter. The Company also announces an increase of $0.01 in the quarterly dividend rate, representing a yearly dividend rate of $0.52 compared with $0.48 currently.
"Our third quarter results demonstrate the strength of our Company, its management and its strategy going forward. We have been able to grow earnings and generate significant free cash flow despite one of the toughest economic climates in recent years," said Charles G. Cavell, President and CEO Quebecor World Inc.
Consolidated revenues for the third quarter were steady at $1.62 billion compared to $1.63 billion during the same period in 2001. In our largest market, North America, the operating margin was 11.9%, equal to the same period last year.
"Quebecor World's early focus on cost containment which was started last year, is allowing the Company to maintain industry leading margins despite reduced revenues in a competitive pricing environment," said Mr. Cavell. "With fewer but more specialized plants we are able to provide more effective service to our customers and greater benefits to our shareholders. With 10 facilities closed, our restructuring initiatives in North America are essentially completed and Quebecor World is uniquely positioned to produce even greater returns when the economy recovers."
In Europe revenues increased 17% to $248 million in the third quarter and operating margins also increased. Much of this was due to the Company's acquisition of the printing assets of Hachette Filipacchi and an improvement in our business outside France. The Company is still being impacted negatively by the underperformance of its French operations and expects to announce additional measures in the fourth quarter to reduce costs that will materially improve French results going forward.
In Latin America our business continues to grow. In the third quarter revenues increased 12% to $45 million, operating income tripled to $5.2 million and margins increased to 11.6%. During the quarter our facility in Mexico City completed delivery of the Mexico City telephone directories that are among the largest in the world. In all, the 3.6 million directories contain more than five billion pages. Our Latin American team is winning market share and continuing to leverage the Company's relationships with North American and European retailers and publishers demonstrating they can use our Latin American platform to improve delivery and reduce costs while ensuring consistent world level quality.
Free cash flow from operations was $97 million for the third quarter of 2002 and $443 million for the trailing 12 months ended September 30, 2002. For the period ending September 30, 2002, long-term debt was reduced by $268 million compared to the same period last year. On a year-to-date basis, financial expenses were $127.5 million, a 20% improvement compared with the same period last year due to reduced bank borrowings and lower rates of interest on long-term debt and securitization. This improvement reflects management's efforts to strengthen the Company's financial condition through tight management of working capital and capital spending requirements. This strategy has resulted in lower financial expense that has contributed to earnings per share. The Company intends to continue this strategy in the short term.
In recognition of the Company's strong earnings performance and strong financial position the Board of Directors is increasing its quarterly dividend $0.01 cent per share to $0.13 per share or $0.52 per share on an annualized basis on Multiple Voting Shares and Subordinate Voting Shares. The Board also declared a dividend of CDN$0.3125 per share on Series 2 Preferred Shares, CDN$0.4219 per share on Series 4 Preferred Shares and CDN$0.43125 on Series 5 Preferred Shares. The dividends are payable on December 1, 2002 to shareholders of record at the close of business November 15, 2002.
Quebecor World Inc. also announced today that it has filed its quarterly report for the quarter ended September 30, 2002 with the Securities and Exchange Commission. The report contains certifications from Charles G. Cavell, President and Chief Executive Officer and Christian M. Paupe, Executive Vice President, Chief Administrative Officer and Chief Financial Officer, that the periodic report fully complies with the Securities Exchange Act of 1934 and that the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the company. These certifications are in accordance with the requirements of the Sarbanes-Oxley Act.
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