MONTREAL – While second quarter revenues jumped 10.2%, Cogeco Communications saw profits for the period plunge by about 44% without the gains related to U.S. tax reforms that it recorded in the same period last year.
Profits for the period ended February 28, 2019 were $80.8 million, of which $76.3 million was attributable to the owners of the Corporation, down from $143.8 million, of which $140.9 million was attributable to owners of the Corporation in the comparable period of fiscal 2018. The company said late Tuesday that the variation is mainly due to last year's $94 million income tax reduction following the United States tax reform and depreciation and amortization, partly offset by higher adjusted EBITDA combined with the decrease in integration, restructuring and acquisition costs and a lower loss from discontinued operations.
Revenue increased by 10.2% to reach $584.1 million, mainly driven by growth of 25.1% in the American broadband services segment. On a constant currency basis, revenue grew by 7.6%.
Cogeco said that Canadian broadband services revenue increased by 0.8% mainly as a result of rate increases implemented in November 2018 in both Ontario and Quebec and higher net pricing from consumer sales, partly offset by decreases in video and telephony services customers.
Adjusted EBITDA was up 12.9% to $280.6 million. On a constant currency basis, adjusted EBITDA increased by 10.5%.
After selling off its business ICT services subsidiary Cogeco Peer 1 just prior to the end of the quarter, its operating and financial results for both the current and comparable periods have been reclassified as discontinued operations.
President and CEO Philippe Jetté said that the $720M transaction means the company can now focus its resources and efforts on its Canadian and American broadband services segments, “with greater flexibility to pursue organic investment and acquisition opportunities.”
Jetté added that he was “very satisfied” with the company’s overall results for the second quarter of fiscal 2019.
“In our Canadian broadband services segment, Cogeco Connexion’s results and operations have been returning to levels that are in line with its performance before the implementation of a new advanced customer management system in fiscal 2018 which impacted operating results of the last few quarters,” he continued. “We are pleased to see increases in both revenue and adjusted EBITDA compared to the same quarter of last year.
“At Atlantic Broadband, our American broadband services subsidiary, I am delighted to report that we continue to see solid organic growth.”
Cogeco’s second quarter financial report to shareholders is available here.
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