MONTREAL – Cogeco Inc. saw its second quarter revenue increase by 7.7%, to reach $578.5 million in the second quarter of 2016, driven by growth in the company’s the cable and enterprise data services segment (which it now calls its communications segment)
The improvement of its American broadband services operations, combined with favorable foreign exchange rates compared to the same period of the prior year, helped drive results, says the company’s Wednesday evening press release.
Adjusted EBITDA increased by or 10.1%, to reach $252.1 million compared to the same period of fiscal 2015, and was also helped by the improvement in the media activities (its radio division) despite the sale of Métromédia CMR Plus on January 5 to Bell Media.
Profit for the period amounted to $75.7 million and is mostly attributable to the improvement of adjusted EBITDA combined with the gain on disposal related to the sale of Métromédia, partly offset by increases in depreciation and amortization and integration, restructuring and acquisition costs. The earnings per share for the quarter were also positively impacted as a result of higher management fees paid by Cogeco Communications to the corporation under the amended and restated management services agreement, reads the release. Under the new agreement, management fees are payable on a monthly basis. In the previous fiscal year, management fees were fully paid in the first quarter, contributing to lower profit attributable to owners of the Corporation for the second, third and fourth quarters.
Free cash flow reached $77.2 million in the quarter ended February 29, 2016, up 12%, compared to the same quarter of the prior year.
"Overall, our results for the second quarter of the 2016 fiscal year have been satisfactory," said Louis Audet, president and CEO, in the press release. "Cogeco Communications' American broadband services subsidiary, Atlantic Broadband, continues to report strong results and solid organic growth following the acquisition of the Connecticut system. Meanwhile, Cogeco Communications' Canadian broadband services subsidiary, which was renamed Cogeco Connexion, continues to report satisfactory results in a highly competitive market. Cogeco Connexion also reviewed its product offering during the quarter and launched a new entry-level package and a number of new packages on March 1 which provide customers with greater flexibility and choice.
"Cogeco Communications' Business ICT services subsidiary, Cogeco Peer 1, is pursuing its plan to build competitive product portfolios," added Audet in the press release. "As this exercise progresses, in an increasingly competitive market, we are deploying new sales strategies and streamlining our product-offering, focusing on profitability."
