MONTREAL – Over the third quarter of fiscal 2007, ended May 31st, revenue at Cogeco Inc. increased by 46.2% reaching $277.4 million and operating income before amortization improved by 44.4%, to stand at $95.5 million.
While Cogeco operates a number of radio stations and has majority control of Quebec conventional broadcaster TQS, it’s the cable side – in Quebec, Ontario and Portugal, that’s really driving the company.
“The cable subsidiary continued to exceed the last financial projections. Revenue generating units (RGUs) are up as well as overall financial results. The media sector improved its revenue mainly due to the performance of the radio and despite the highly competitive environment in the television market,” says the company’s press release, sent out Friday evening.
Cogeco Cable’s results are still ahead of its last financial projections. Revenue was up 56.3% reaching $240.6 million and operating income before amortization improved by 54.8%, standing at $97.9 million.
During the first nine months of fiscal 2007, the consolidated number of revenue generating units increased by 11.5% to reach almost 2.44 million units, en route towards the achievement of Cogeco Cable’s 2007 revised projections of 13% to 14% for the fiscal year 2007.
(An RGU is a customer with one Cogeco product, meaning a subscriber who has cable, Internet and phone counts as three RGUs.)
"Our financial results exceed last April’s guidance,” noted company president and CEO Louis Audet, in the release. “Our Canadian and Portuguese subsidiaries are experiencing a steady progression thanks to a continuous improved penetration of our digital telephony service in Canada and improved penetration of all services in Portugal. Our customers appreciate our triple play of leading video, internet and voice services.”
In radio, Rythme FM remains the top-rated station in the Montreal market. “Our Trois-Rivieres and Sherbrooke stations are progressing well and we are continuing to recapture market share with our two radio stations in Quebec City. In television, TQS maintained the second position among the conventional television networks despite the fact that competition is fiercer than ever in this market," added Audet.
So, to better reflect the improved performance of the cable sector for the first nine months of fiscal 2007 and to take into consideration a non-recurring charge of $2.5 million recorded in the third quarter of fiscal 2007, management has revised its projections for the fiscal year 2007. Therefore, consolidated revenue should reach approximately $1.075 billion, operating income before amortization $363 million and net income should stand at $48 million.
In addition, the Company announced its 2008 preliminary guidelines, setting revenue outlook at about $1.19 billion, operating income before amortization to approximately $425 million and free cash flow to approximately $60 million.
