MONTREAL – Fourth-quarter revenue climbed by $9.6 million, or 6.2%, over the same period last year at Cogeco Inc., but poor performance on the company’s broadcast TV side dragged down its overall results.
The improved penetration of high-speed Internet services (HSI) and higher rates for cable TV services are mainly responsible for this increase. Net income came in at $600,000, or $0.04 per share, compared to $2.1 million or $0.13 per share in the previous fiscal year. “The net income dropped due to a reduction in operating income before amortization in the media sector,” says today’s press release.
"Among the quarter’s milestones, the launch of our digital telephony service really stood out. Customer response to this new product exceeded our expectations in the areas where the service was introduced. Launched across 24% of our territory as of October 21, 2005, the service is now available to all residents in the areas served, whether or not they are Cogeco Cable customers. By August 2006, most of our major markets will benefit from this attractive service," said Louis Audet, Cogeco’s president and CEO.
Cable operating income before amortization rose by 11.9%, surpassing the initial growth objective of 8% to 9% and Free Cash Flow stands at $45.3 million, within the projected range.
In Cogeco’s radio division (RYTHME FM), revenues are up sharply “thanks to excellent audience ratings for the group’s stations, which are rising in their respective markets. RYTHME FM Montréal’s number one position was confirmed in BBM surveys conducted this past summer,” says the release.
In television, revenues are down due to a difficult advertising environment for conventional television and increased competition. TQS has made investments in programming and will continue to do so, in order to improve its audience ratings and increase its profitability in the seasons to come.
As for 2006, Cogeco Cable expects to continue growing in fiscal 2006. The projections are for a sustained increase in customers, particularly for digital and telephony services. As a result of strong demand for its telephony service, Cogeco Cable has revised its projected customer growth from between 7,000 and 8,000 to a range of 32,000 to 37,000.
In the media sector, radio should continue to grow and consolidate its position in the various markets. In television, TQS’s commitment to its "black sheep" positioning is stronger than ever. The channel’s bold programming is blazing new trails for conventional television in an environment that is fiercely competitive and constantly changing.
Surf back to www.cartt.ca for more on this story later today.
