MetroCast acquisition “progressing according to plan”
MONTREAL – Cogeco Communications said that deferred income taxes related to U.S. tax reforms helped to power a jump in profits for its second quarter ended February 28, 2018.
Profits of $141.8 million, of which $138.9 million was attributable to the owners of the Corporation, skyrocketed 84.9% from the $76.7 million posted in the comparable period of fiscal 2017. The company said late Thursday that this was mainly as a result of the $89 million (US$70 million) reduction in deferred income taxes related to the recent U.S. tax reform and the improvement of adjusted EBITDA, partly offset by increases in depreciation and amortization, integration, restructuring and acquisition costs and financial expense as a result of its acquisition of MetroCast.
Revenue increased 6.8% to $598.9 million, mainly driven by growth of 28.8% in its American broadband services segment and stable revenue in its Canadian broadband services segment, partly offset by a 7.8% decrease in the Business information and communications technology (Business ICT) services segment. On a constant currency basis, revenue increased by 8.8%.
Cogeco said that Canadian broadband services revenue remained stable resulting from promotional pricing provided to customers and a decline in video and telephony services customers, offset by rate increases implemented in September 2017 and November 2017 in Ontario and Quebec, respectively.
Adjusted EBITDA increased by 5.6% to $268.1 million. On a constant currency basis, adjusted EBITDA increased by 7.4%.
Canadian primary service units (PSUs) were 1.91 million for the three month period and 874,090 in the United States.
At quarter end, Cogeco’s Canadian video service customers totaled 708,584 (down 7,020 year-over-year); Internet service customers reached 786,314 (up 6,880); and telephony service customers were 419,280 (down 5,621).
President and CEO Louis Audet said that results overall are “stable and in line with expectations”.
"Results for Cogeco Connexion, our Canadian broadband subsidiary, remained steady despite the highly competitive market environment", he said in a statement.
"At Atlantic Broadband, results are aligned with our forecasts and we are satisfied with the current direction of our strategy in the United States," continued Audet. "We are very pleased with the work being done to ensure the smooth integration of the MetroCast acquisition which is progressing according to plan. In addition, our American broadband subsidiary has seen an increase in primary service units in the last quarter most notably thanks to our successful expansion in Florida."
"Our Business ICT subsidiary, Cogeco Peer 1, remains focused on building and offering a relevant suite of solutions and providing expert advice in a constantly evolving and intensely competitive market", he added.
Click here for Cogeco’s second quarter financial report to shareholders.
