MONTREAL – Following the lead of its peers, Cogeco Cable’s Canadian operations continued to grow during the recession, the company reported today. The company continues to struggle in Portugal, although it is reporting some positive indications there.
Fourth quarter 2009 consolidated revenue increased by 8% to reach $307.8 million, when compared to the corresponding period of the prior year. Driven by increased revenue-generating units combined with rate increases and the financial results generated by the acquisition of Cogeco Data Services in the last quarter of fiscal 2008, fourth-quarter Canadian operations revenue went up by $34.8 million, or 15.8%.
However, the company’s Portuguese division, Cabovisao, continues to struggle. Fiscal 2009 fourth-quarter European operations revenue decreased by $11.9 million, or 18.6%, to $52.2 million “as a result of the difficult competitive environment and intense promotions and advertising initiatives from competitors in the Portuguese market, despite an increase in RGU in the quarter and the favourable impact of the appreciation of the Euro over the Canadian dollar,” says the company.
For the 2009 fiscal year, consolidated revenue grew by 13.1% to reach $1.218 billion
Fiscal 2009 fourth-quarter operating income before amortization increased by $28.5 million, or 23.3%, to reach $150.5 million, as a result of the favourable impact of $19.8 million from the settlement of the Part II licence fees payable to the CRTC for the 2007 to 2009 fiscal years, RGU growth, the CDS acquisition and various rate increases generating additional revenues. For fiscal 2009, consolidated operating income before amortization grew by 17.7% to reach $524.4 million
During fiscal 2009, a $399.6 million non-cash impairment loss on the Corporation’s investment in Cabovisao was recorded as a result of competitive pressure resulting in customer losses that were more severe than originally anticipated. Net of related income taxes, the impairment loss amounted to $383.6 million.
Fourth-quarter 2009 consolidated net income amounted to $46.6 million compared to $31.9 million for the corresponding period of the prior year. Excluding the favourable impacts from the reduction of withholding and stamp tax contingent liabilities in the amount of $5.2 million in Europe and from the $13.4 million, net of related income taxes, with respect to the Part II licence fee settlement agreement in Canada, adjusted net income would have amounted to $28 million, a decrease of $3.9 million, or 12.1% compared to the fourth quarter of ’08
Consolidated net loss amounted to $256.7 million for fiscal 2009 compared to net income of $133.3 million in the prior year. Excluding the impairment loss of $383.6 million and the favourable impacts from the reduction of withholding and stamp tax contingent liabilities in the amount of $16.1 million in Europe and of $13.4 million, net of related income taxes, from the Part II licence fee settlement agreement in Canada, as well as an unfavourable impact of $6.1 million from the utilization of Cabovisao’s pre-acquisition tax losses, adjusted net income would have amounted to $103.6 million, a decrease of $5.7 million, or 5.2% compared to $109.3 million for fiscal 2008.
"Despite the economic difficulties that marked fiscal 2009, we are pleased with Cogeco Cable’s financial results, with most key performance indicators surpassing our expectations. Our Canadian operations enjoyed solid growth, with RGU additions of 167,955 for the year, exceeding by far our guidelines,” said CEO Louis Audet in a press release this morning.
“In our European operations, Cabovisao has implemented far-reaching strategies to counter the severe competitive pressure in that market. Management believes that the turnaround phase is solidly underway, with RGU additions of 20,430 during the fourth quarter of 2009. As always, customer satisfaction remains our focus, and our new Canadian operational structure and the many enhancements made to our service offerings in fiscal 2009, will pave the way for growth in fiscal 2010.”
