MONTREAL – Cogceco Communications credited growth in its Canadian broadband services for an uptick in revenues and profits for its first quarter of fiscal 2018 ended November 30, 2017.
Profit for the period was essentially flat at $76.5 million compared to $75.0 million in the comparable period of fiscal 2017, mainly as a result of the decreases in depreciation and amortization and in financial expense, mostly offset by a lower adjusted EBITDA and an increase in income taxes.
Revenue increased 0.8% to $553.6 million from $549.1 million year-over-year, mainly driven by the growth of 3.2% in the Canadian broadband services segment, partly offset by the decreases of 1.4% in the American broadband services segment and of 4.5% in the Business information and communications technology services segment, the company said late Wednesday.
Cogeco said that Canadian broadband services revenue increased mainly as a result of the impact of the timing of rate increases implemented in September 2017 and in November 2017 in Ontario and Quebec, respectively, compared to December 2016 in the prior year. The continued growth in Internet service customers combined with the movement of customers to higher value packages also contributed to the increase which was partly offset by a decline in video and telephony services customers, added the company.
Adjusted EBITDA dipped 0.9% to $247.5 million from $249.7 million in the same period last year, mainly as a result of the decreases in its American broadband services and Business ICT services segments, partly offset by the improvement in its Canadian broadband services segment.
Free cash flow remained essentially the same at $102.3 million compared to $101.4 million for the same period of the prior year as a result of the decrease in financial expense, mostly offset by the decrease in adjusted EBITDA.
Consolidated primary service units (PSUs) were 2.53 million of which 1.92 million are in Canada and 611,032 are in the United States.
At quarter end, Cogeco’s Canadian video service customers totaled 715,604 (down 5,032 year-over-year); Internet service customers reached 779,434 (up 9,565); and telephony service customers were 420,416 (down 5,940).
President and CEO Louis Audet said that the company’s first quarter results are “generally aligned with our guidance for the full year”.
"Cogeco Connexion, our Canadian broadband subsidiary, reported financial results that were above expectations largely thanks to overall judicious management", he said in a statement.
"Atlantic Broadband, our American broadband subsidiary, posted results in line with expectations apart from the impact of unforeseen challenges when hurricane Irma hit the Florida region in the fall," continued Audet. "Teams in place worked diligently to ensure the safety of our employees and quickly restored service to our customers. I am proud of how our teams prioritized customers during this difficult time, while they were also preparing for the closing of the MetroCast acquisition and the expansion of our Florida operations."
"The focus for Cogeco Peer 1, our Business ICT subsidiary, is to reinforce their role as a trusted advisor, offering relevant solutions in a market where change is perpetual and the competition is increasingly relentless," he added. "Cogeco Peer 1 is on its trajectory intended to renew with growth."
Cogeco’s first quarter financial report to shareholders is available here.
