MONTREAL – Cogeco Communications credited its purchase of U.S. cableco MetroCast for a 15.1% increase in revenues for its first quarter of fiscal 2019 ended November 30, 2018.
Profit for the period dipped 3.1% to $79.1 million, of which $26.2 million was attributable to owners of the Corporation, resulting mainly from increases in depreciation and amortization, financial expense and integration, and restructuring and acquisition costs, that were partly offset by the improvement of adjusted EBITDA and a decrease in income taxes.
Revenue reached $674.0 million, up from $585.7 million in the same period last year, driven by growth of 16.3% in its Communications segment that was partly offset by a decrease of 5.4% in its Other segment, described which Cogeco said resulted mainly from a soft advertising market and increased competition.
Adjusted EBITDA increased by 15.0% to $293.9 million, mostly attributable to the improvement in its Communications segment as a result of the MetroCast acquisition.
Free cash flow increased by 9.3% to $119.3 million as a result of the improvement in adjusted EBITDA and a decrease in current income taxes expense, partly offset by the increases in financial expense, acquisitions of property, plant and equipment and integration, restructuring and acquisition costs.
Consolidated primary service units (PSUs) were 2.62 million of which 1.83 million are in Canada and 880,304 are in the United States.
At quarter end, Cogeco’s Canadian video service customers totaled 675,699; Internet service customers reached 778,996; and telephony service customers were 376,933.
President and CEO Philippe Jetté said that overall results for the first quarter are in line with Cogeco’s 2019 financial guidance.
“At Cogeco Connexion, the stabilization phase related to the implementation of a new advanced customer management system extended into the first quarter as anticipated”, he said in a statement. “I am confident that as of today these issues are mostly behind us and that operations in our Canadian broadband services operations are now running as expected.”
“In our American broadband services operations, we are pleased to report continued solid organic growth,” he continued. “The acquisition of FiberLight’s south Florida fibre network has more than doubled Atlantic Broadband’s fibre footprint in the region, further expanding our presence in this strategic growth market.”
Jetté added that results in the company’s Business ICT services operations “reflect the continued increase in competition and pricing pressures in this market.”
“In our radio business, although the advertising market continues to be soft, we were pleased to end the quarter by closing the acquisition of 10 regional radio stations owned by RNC Média inc.,” he said. “Cogeco Media now has a network of 22 radio stations across the province of Québec and 1 in Ontario, providing an excellent opportunity to enhance our position in this industry while enriching our offering for both listeners and broadcasters.”
Cogeco’s first quarter financial report to shareholders is available here.
