TORONTO – Growth in cable, Internet, and telephony subscribers has led Cogeco Cable to predict a 36% increase in net income in 2006, the company announced at its annual shareholders’ meeting.
And the company is exploring adding wireless, like competitor Vidéotron will do in Quebec when it launches mobile phone services through Rogers, CEO Louis Audet told reporters.
Net income in 2005 nearly tripled, to $28.7 million, compared with a net loss of $32 million in 2004. Cogeco predicts net income will rise to $39 million in fiscal 2006.
In 2005, the company lost 2,400 basic cable subscribers, but boosted the number of digital customers by 22.5% from a year before (to 255,000), and increased high-speed Internet subscribers by 15.9% (to 278,000).
Customers were lured by more digital tiers, the expansion of high definition and video on demand channels, and the introduction of VoIP services, Cogeco says. Digital telephony will be rolled out to most Cogeco territory by the end of 2006. As of November, VoIP was available to about 30% of Cogeco customers.
“The 2005 results exceed our objectives. Fiscal 2005 permitted Cogeco Cable to solidify its position and improve its financial performance. The corporation’s current growth and promising outlook allow it to look to the future optimistically. The launch of our digital telephony service expands our line of products and gives our customers the best quality/price ratio available on the market,” Audet said in the company news release issued after the general meeting.
After three years of a positive cash flow, Cogeco is ready to make some more acquisitions, reminiscent of the buying spree it went on in the late 1990s. It hasn’t made any purchases since 2001.
Audet told reporters that Cogeco is looking at acquiring cable operators in Europe. “In fact, Europe today looks a lot like Canada circa 1995: a number of non-integrated, medium-sized companies that are available for sale as the financial institutions who buy them up resell them,” Audet is quoted by Canadian Press. Audet said the company has made some bids for European operators but none were successful.
Audet alluded to European expansion in the news release. “Fiscal 2006 will be our opportunity to consolidate our growth, both by increasing and enhancing our product and service offerings and by acquiring new clienteles, within Canada and abroad.”
The news release said nothing about expanding into wireless, but according to CP, Audet said it was "clearly a valid option" and hinted that he’s had discussions with the incumbent wireless carriers.
