MONTREAL – Growth in Cogceo Inc.’s cable and enterprise data services segment and U.S. cable services operations helped to buoy its first quarter revenues and profits.
The Montreal-based company reported revenue of $582.9 million for the period ended November 30, 2015, up 8.3% from $538.4 million in the same period last year, driven by growth in its Cable and Enterprise data services segment mainly through improvements at its American cable services operations, favorable foreign exchange rates, and increases in its radio and out-of-home advertising segments.
A 2.2% rise in profits to $66.8 million, of which $25.2 million is attributable to owners of the corporation, was attributed to the improvement of adjusted EBITDA, partly offset by increases in depreciation, amortization and income taxes. Adjusted EBITDA increased by 9.0%, to $255.2 million from $233.9 million year-over-year.
The company also unveiled new brand identities and names at its annual shareholders' meeting Wednesday. The Cogeco Inc. logo remains as the master logo for the family of companies including all of its subsidiaries in Canada, the United States and Western Europe, with the exception of its American cable subsidiary Atlantic Broadband. However, Cogeco Cable Inc. is now Cogeco Communications Inc., its Canadian cable services subsidiary Cogeco Cable Canada becomes Cogeco Connexion, and its radio sector subsidiary Cogeco Diffusion is now Cogeco Media.
Free cash flow of $40.9 million tumbled 42.1% from $70.7 million in the same quarter of the prior year resulting from a timing difference in the acquisitions of property, plant and equipment and an increase in current income taxes, partly offset by the improvement of adjusted EBITDA.
Cogeco Connexion (formerly Cogeco Cable Canada) saw its first quarter revenues increase 8.7% to $540.3 million, while profits grew 7.8% to $61.1 million resulting from an improvement in adjusted EBITDA, partly offset by the increases in depreciation and amortization and income taxes. Adjusted EBITDA jumped 11.6% to $244.1 million.
Canadian cable services revenue was essentially flat as a result of lower primary service units (PSUs) compared to the same period of the prior year, partly offset by rate increases and the continued growth in its business sector, the company detailed.
PSUs, which represent the sum of its television, high-speed Internet and telephony service customers, were 2.51 million of which 1.93 million are in Canada and 577,452 are in the United States.
Cogeco said it lost 5,563 video service customers in the period, compared to a loss of 8,465 in the first-quarter of fiscal 2015, mainly due to customers' ongoing interest in TiVo digital advanced video services in both Canada and the United States, partly offset by service category maturity and competitive offers in the industry.
Internet service customers grew by 18,664 compared to 18,535 year-over-year as a result of the enhancement of the product offering, the positive impact of the bundle offers, ongoing interest in TiVo's services which requires an Internet subscription, and growth in the business sector.
Telephony service net additions slowed to 176 versus 1,018 for the first quarter of fiscal 2015, mainly attributable to the increasing mobile penetration rate in North America and various unlimited offers launched by mobile operators which caused fewer customers to subscribe to landline telephony services.
At quarter end, Cogeco’s Canadian television customers totaled 761,209; high-speed Internet customers reached 716,577; and telephony service customers were 455,741.
"Overall, our results for the first quarter of the new fiscal year have been satisfactory," said president and CEO Louis Audet, in the news release. "Our American cable services subsidiary, Atlantic Broadband, has successfully completed the integration of its acquisition in Connecticut and it continues to report strong results helping us consolidate our presence in the American market. Meanwhile, our Canadian cable services subsidiary continues to report satisfactory results."
Audet added that results at Cogeco Media (formerly Cogeco Diffusion) "continue to be very positive" due to the strong performance of the company’s radio and transit display advertising.
