Bell Aliant not worried by profit plummeting in Q1

Eastern Canadian telco Bell Aliant has reported a steep drop in first-quarter net profit to CAD84 million (USD87 million) from CAD301 million a year earlier, on revenues that decreased by CAD7 million year-on-year to CAD682 million, as the continuing decline in fixed telephony earnings offset growth in its broadband internet and pay-TV businesses. However, Aliant’s CEO Karen Sheriff said that the company is on the right track in the long-term by focusing on investing in its fibre-to-the-home (FTTH) network expansion, stating: ‘We expect EBITDA to be under pressure for the balance of this year as we incur start-up costs associated with increasing the number of customers subscribing to this new technology … That said, it is short-term pain that we can live with, considering the long-term benefits of the competitive advantage [Aliant’s FTTH triple-play service] FibreOP gives us.’ EBITDA fell by 2.8% y-o-y in 1Q11, while CAPEX increased by 26.7%. ‘Capital expenditures are expected to continue to increase in the coming quarters of 2011 as Bell Aliant executes its plan to pass over 600,000 homes and businesses with FibreOP services by the end of 2012,’ the company’s statement said.