MONTREAL – Cogeco Inc. credited favourable exchange rates plus growth in its cable divisions, both here and Stateside, for a 4.1% increase in third quarter revenues and a 86% jump in profits.
The Montreal-based company said late Tuesday that revenue for the period ended May 31, 2015 was $557.8 million, up from $536.1 million in Q3 last year. Profits of $66.3 million, of which $22.6 million is attributable to owners of the corporation, reflected improvement of the adjusted EBITDA combined with last year's impairment of property, plant and equipment of $32.2 million, partly offset by increases in financial expense and income taxes.
Adjusted EBITDA increased by 6.0% to $247.0 million, from $233.1 million year-over-year, while free cash flow dropped 14.9% to $77.9 million.
Primary service units (PSUs), which represent the sum of its television, high-speed Internet and telephony service customers, were 2.45 million of which 1.94 million are in Canada and 511,832 are in the United States.
In Canada, PSUs decreased by 6,735 for the third quarter of fiscal 2015, compared to 5,633 for the same period last year, mainly as a result of a lower increase in HSI services and a higher decrease in Telephony services, partly offset by a lower decrease in Television services
At quarter end, Cogeco’s Canadian television customers totaled 774,977; high-speed Internet customers reached 700,090; and telephony service customers were 461,856.
“Our results are in line with expectations for the third quarter of fiscal year 2015", said president and CEO Louis Audet, in a statement. “We continue to focus on expanding our service offering and on improving our customer experience while maintaining a rigorous cost control discipline in how we leverage our spending as well as continuing to seize on growth opportunities.”
Cogeco added that it and its subsidiary Cogeco Cable amended the Management Services Agreement in place since 1993 to take into account the significant expansion of the business activities of Cogeco Cable in recent years. Starting in fiscal 2016, Cogeco Cable will pay monthly fees equal to 0.85% of its consolidated revenue to Cogeco, and the amendment should have a favorable impact on the profit attributable to owners of the Corporation.
