MONTREAL – On Thursday evening, Cogeco Inc. reported revenue increased by 4.5% in its 2021 fiscal first quarter, ended November 30, 2020, to reach $646.4 million.
Canadian broadband services revenue increased by 2.2% “as a result of the cumulative effect of sustained demand for residential high speed Internet since the beginning of the pandemic due to customers spending more time at home for work, online education and entertainment purposes, and rate increases implemented for certain services, partly offset by a decline in video service customers,” said the press release.
At its U.S. Atlantic Broadband division, “services revenue increased by 9.8% in constant currency resulting mainly from strong residential Internet service additions, rates increases, the impact of the Thames Valley Communications acquisition completed on March 10, 2020 and increased political advertising revenue related to the United States’ presidential election.”
Cogeco’s overall adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 10.5% to reach $321.1 million and “Canadian broadband services adjusted EBITDA increased by 8.8% in constant currency mainly due to an increase in revenue combined with a decrease in operating expenses attributable primarily to sales and marketing activity deferred to the second half of the year in the context of the Covid-19 pandemic,” the release continues.
Profit for the period amounted to $120.4 million, a 28% increase over the prior year’s Q1. Free cash flow increased by 36.1% to reach $148.2 million.
“Both our Canadian and American broadband segments showed strong increases in EBITDA compared to the first quarter of last year, largely explained by unique circumstances that were favourable to our business,” said Philippe Jetté, president and CEO. “In particular, the pandemic continued to accelerate changes in customer behavior and highlight the value of our fixed broadband product while allowing for the deferral of certain operating activities to the second half of the year. This resulted in a strong operating performance which, combined with lower capital expenditures, allowed us to increase free cash flow by 36% compared to the same period last year.”
As for the subscriber side, Cogeco’s Canadian cable operations added 3,200 new Internet customers (down from 6,700 additions in Q1 2020) and pay-TV subscriber losses were 7,000 in the quarter, more than double the 3,300 subscriber losses in the same time frame last year.
“We were also pleased to announce the completion of the DeryTelecom acquisition, the third-largest cable operator in the province of Québec, enabling us to significantly expand our activities in more than 200 municipalities in Québec and adding approximately 100,000 customers to Cogeco Connexion’s client base.
“As for Cogeco Media, we are satisfied with its results and have been maintaining our financial discipline given the continued impact of the pandemic on the advertising market,” he added, referencing the company’s radio division which has suffered heavy ad revenue losses, as have most broadcasting operations.
Radio saw a revenue decline of 13% in the quarter compared to the previous year, however, the decline in revenue was an improvement compared to the previous quarter which had 29% year-over-year revenue decline.
