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Bruce Telecom 2012 budget includes $1-million dividend for Municipality of Kincardine By Liz Dadson |
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Bruce Telecom is ringing in a profitable new year, with strong financial results from the third-quarter of 2011, and a $1-million dividend for the Municipality of Kincardine included in this year's budget.
The company's board chairperson, Holly Robinson-Colley told council that Bruce Telecom celebrated its 100th anniversary last year; the $5.5-million infrastructure upgrade is ahead of plan; the financial performance was better than budgeted; there has been growth in television and wireless activations; and there was a launch of new billing and operations software. Cameron said the infrastructure upgrade will benefit customers by allowing them to watch more (expansion of the television serving area), connect more (with increased Internet speed), and save more (with enhanced bundle opportunities). The upgrade project is ahead of schedule and expected to be on-budget, said Cameron. This year, the company will be tidying up loose ends, converting customers to the new system, and providing further rural upgrades. As for the finances, he said they were significantly better last year than had been budgeted. Net revenue was almost $300,000 compared to a budget of $113,448. "The increased revenue is the result of success in some areas, and saving on costs," said Cameron. To the end of September, 2011, net income was $1.1-million, he said, while the budgeted figure was $400,000 - a significant increase. Revenue is above-budget by $340,000, said Cameron, there was a savings of $115,000 in cost of sales, and operating expenses were under-budget by $245,000. However, compared to 2010, income actually declined last year, he said. Operating expenses were up $415,000, and depreciation costs were up $75,000 related to continued investment in capital projects, but that was off-set by an improvement in gross margin of $65,000. This year, the company is expecting a net income of $1.3-million on a budget of $500,000, said Cameron. The infrastructure upgrade should be completed by early 2012 and the budget includes investment in customer service delivery and growth of television and wireless products. The 2012 budget includes $1.9-million in base capital projects, as well as $300,000 for infrastructure upgrade work, Cameron said, for a total of $2.25-million. Base capital is comprised of purchases related to sustaining operations and investment in Fibre-to-the-Home, hardware upgrades, and equipment replacements.
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The budget also includes a $1-million dividend to Bruce Telecom's owner, the Municipality of Kincardine, to be paid in four equal installments. That's the same amount as last year, said Cameron. The Bruce Telecom board and management requested Kincardine council approve the 2012 budget. "That $1-million looks good," said councillor Randy Roppel, asking whether paying that amount will affect the company's operations. "No," said Cameron. Roppel also asked what impact the new rules and regulations from the Canadian Radio-television and Telecommunications Commission (CRTC) will have on Bruce Telecom. The proposed changes would be similar to deregulating long-distance service, only it would affect local telephone service. "It could be a most unfortunate position," said Cameron, noting that the 2012 budget attempts to mitigate some of those impacts. Later in the meeting in council session, the Bruce Telecom 2012 budget was officially approved. Scrolling stops when you move your mouse inside the scroll area. You can click on the ads for more
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