BCE Inc

Dividend Reduction: BCE has announced a significant cut in its annual dividend from $3.99 to $1.75 per share, effective with the July payment. This decision aims to accelerate deleveraging targets, reducing net debt leverage to approximately 3.5 times adjusted EBITDA by the end of 2027. The new payout policy will range from 40% to 55% of free cash flow, providing flexibility for future investments and financial stability.

U.S. Fiber Growth Strategy: BCE is expanding its footprint in the U.S. Fiber market through a strategic partnership with PSP Investments, which will help fund the development of approximately one million Fiber passings initially, with a longer-term goal of reaching six million. This partnership is expected to improve BCE’s free cash flow by over $1 billion from 2026-2028 and aims for a 20% or higher return on investment, leveraging PSP’s infrastructure investment capabilities.

Operational Performance: In Q1, BCE reported stable adjusted EBITDA, while net earnings surged nearly 50%, largely due to early debt redemptions. Free cash flow increased significantly by $713 million year-over-year, aided by lower capital expenditures and improved working capital management. However, total revenue dropped by 1.3%, primarily due to a decline in low-margin product sales.