MONTREAL – Broadband provider and broadcaster Cogeco Inc. saw its fourth quarter 2019 revenue increase by 3.1% compared to Q4 last year to reach $610.5 million, the company reported late Wednesday.
Revenue for the full fiscal year, ended August 31st, came in at $2.44 billion, an 8% increase.
Revenue increased in the company’s communications (video, broadband, home phone) segment, “mostly as a result of organic growth and the acquisition of the south Florida fibre network previously owned by FiberLight… on October 3, 2018 combined with the activation of bulk properties in Florida during the fourth quarter of fiscal 2019 in the American broadband services operations,” reads the company press release.
Revenue increased by 2.9% in the company’s broadcasting segment mainly from the acquisition of radio stations from RNC Média during the first quarter of fiscal 2019, partly offset by a soft advertising market and increased competition in the media activities. Total revenue for the media division in fiscal 2019 was $112 million.
Cogeco’s adjusted EBITDA increased by 4.5% to reach $281 million and profit for the period from continuing operations amounted to $95.2 million, a 21.5% increase. Free cash flow from continuing operations increased by 70.6% to reach $87.6 million.
"As we report our results for the last quarter of fiscal year 2019, we are pleased with Cogeco's overall performance," said Philippe Jetté, president and CEO, in the press release.
"In our Cogeco Communications subsidiary, our Canadian broadband services operations' adjusted EBITDA increased in the fourth quarter compared to last year thanks to our cost optimization efforts," he added. "I am also pleased to report that Cogeco Connexion experienced a stabilization of its primary service units, made good progress with its digitization activities and is getting ready to launch its IPTV platform."
"We continue to be very satisfied with results at Atlantic Broadband. Our American broadband services operations closed the fiscal year with healthy increases in revenue, adjusted EBITDA and primary service units. We are pleased with our expansion in the Florida market and are looking for more acquisitions now that our recent acquisitions are fully integrated."
When it comes to total customers, Cogeco reported total broadband customers of 788,000 in Canada and 446,000 in the U.S. as of August 31st. Together, the divisions added 27,000 internet subscribers during the year, which was a 22% slower growth rate than fiscal 2018 but the company said interest remains high for broadband offerings, but results were impacted by competitive offers in the industry in Canada and its “contact centre congestion during the stabilization period of the new customer management system in Canada.”
Cogeco now has 650,000 video customers in Canada and 312,000 Stateside, and together the divisions lost close to 44,000 subscribers during the fiscal year, which is the same number it lost last year.
The company blamed those losses on competition as well as the changing video consumption environment and the aforementioned contact centre issues (noting call center and marketing operations had returned to normal by the end of the first quarter of 2019), partially offset by the activation of bulk properties in Florida during the fourth quarter, customers' ongoing interest in digital advanced video services and interest in video services bundled with broadband in Canada, reads the report to shareholders.
