MONTREAL – Cogeco Inc. saw a small uptick in revenue for the second quarter of its fiscal year, rising to $586.4 million from $578.5 million year-over-year.
For the period ended February 28, 2017, adjusted EBITDA increased by 2.3%, to reach $258.0 million compared to the same period in fiscal 2016 as a result of the improvement in its Communications segment and media activities despite the prior year's sale of Métromédia CMR Plus Inc.
Profit for the period amounted to $78.2 million of which $25.9 million was attributable to owners of the Corporation, compared to $75.7 million for the second quarter of fiscal 2016 of which $33.3 million was attributable to the owners of the Corporation. The increase is mainly due to a decrease in depreciation and amortization combined with the improvement of adjusted EBITDA, partly offset by last year's gain on disposal of Métromédia and an increase in income taxes, says the news release.
Free cash flow reached $119.5 million, a 54.8% increase when compared to the same quarter of the prior year, mainly due to lower acquisitions of property, plant and equipment, intangible and other assets in the Communication segment as a result of the timing of certain initiatives combined with a greater focus on capital expenditure optimization. The improvement of adjusted EBITDA also contributed to the increase in free cash flow.
Over at Cogeco Communications Inc., second quarter revenues grew 1.7% to $560.9 million, mainly driven by growths of 3.1% in the Canadian broadband services segment and of 0.7% in the American broadband services segment, partly offset by a decrease of 1.8% in its Business information and communications technology (Business ICT) services segment.
Canadian broadband services revenue increased as a result of the impact of the timing of rate increases implemented in December 2016 compared to rate increases implemented in February 2016 in the comparable period of the prior year, continued the release. Revenue also benefited from the continued growth in the Internet customer base combined with the movement of customers to higher value packages, partly offset by a decline in video and telephony customers.
American broadband services revenue increased primarily as a result of the primary service units progression, growth in the commercial sector as well as rate increases implemented in September 2016. However, revenue progression has been negatively impacted by the depreciation of the U.S. dollar against the Canadian dollar compared to the same period of the prior year.
Business ICT services revenue decreased primarily as a result of the depreciation of the U.S. dollar and the British Pound currency against the Canadian dollar compared to the same period last year.
Profit for the period of $76.7 million was up by $14.6 million from $62.0 million in Q2 2016, primarily due to the decrease in depreciation and amortization combined with the improvement of adjusted EBITDA, partly offset by the increase in income taxes.
Cogeco Inc. president and CEO Louis Audet said that the company’s second results are “satisfying”.
"In our communications subsidiary, Cogeco Communications Inc., we remain pleased with the results in our Canadian broadband services sector, especially given the competitive conditions in the Canadian broadband market and the maturity of this industry", he said in the release.
"In the American broadband services sector, Atlantic Broadband remains a solid performer," he added. "We are satisfied with results in fiscal 2017 so far, which are in line with our expectations."
"With our Business ICT services business, Cogeco Peer 1, we continue to focus on improvements and generating positive results," continued Audet. "We are implementing thorough action plans for each of our geographic regions and our continued focus on controlling our costs and capital expenditures has resulted in meaningful free cash flow."
"At Cogeco Media, results remain strong. Our radio subsidiary once again performed very well while maintaining its leadership position in the Québec radio market, based on the latest Numeris rankings", Audet concluded.
Click here for Cogeco’s second quarter financial report to shareholders.
