MONTREAL – While Cogeco Inc. has a financially solid year, the company noted in its 2018 fourth quarter and year end results released Wednesday continued to be impacted by ongoing issues with its customer care management software upgrades.
In the fourth quarter, ended August 31, 2018, revenue for the Canadian and U.S. cable and broadband operator increased by 14.1% over the fourth quarter of 2017 to reach $660.0 million while adjusted earnings before interest taxes, depreciation and amortization (EBITDA) increased by 14.8% to hit $288.6 million;
Free cash flow hit $55.3 million, an increase of 6.7%. The increases were driven mostly due to the acquisition of U.S. cable operator MetroCast on January 4, 2018.
For the fiscal year, revenue increased by 8.1% to reach $2.54 billion and adjusted EBITDA increased by 7.6% to reach $1.11 billion, again mostly attributable to the improvement in the Communications segment as a result of the MetroCast acquisition.
The results, however, are tempered by the fact that the company lost 43,795 video customers over the year, mostly in its primary Canadian operations, offset by an addition of 35,590 broadband subscribers in the U.S. and Canada. Cogeco, as of August 31st, had 688,768 video subscribers in Canada and 782,277 broadband customers.
New president and CEO Philippe Jetté said the company’s lower than expected Q4 results can be attributed to serious problems implementing its new customer care management software this year. “This new system will significantly improve our ability to offer digital experiences to our customers, while providing more tools to our contact center agents for an improved customer journey,” said Jetté in the company’s Q4 press release.
“The system stabilization period has however been more challenging than initially anticipated. Teams across Cogeco Connexion have been working tirelessly at restoring our customer service to its traditionally high level. This endeavor should be completed soon and our main focus will return to sales and marketing activities and improving our highly reputable service to our customers.”
