MONTREAL – The acquisitions of Atlantic Broadband and Peer 1 Networks drove results at Cogeco Inc. to new heights, the company reported last Wednesday.
The cable, broadband and radio company saw its fourth quarter revenue increase 41.5% to reach $504.7 million in the fourth quarter ended August 31st and by 30.4% for fiscal 2013 to close at $1.8 billion when compared to the same periods of the prior year;
Operating income before depreciation and amortization increased by 37.1% to $224.3 million compared to the fourth quarter of fiscal 2012, and by 31.4% to $797.4 million compared to the prior year, says the company’s press release. The increases “are mainly from the cable segment and attributable to the acquisitions of Atlantic Broadband and Peer 1 as well as to the financial results improvement from organic growth,” reads the release.
However, profit for the period from continuing operations amounted to $43.8 million in the fourth quarter compared to $44.9 million for the same period of the previous fiscal year. “The decrease is mostly attributable to additional depreciation and amortization and financial expense both related to the recent acquisitions. It is partly offset by the operating income before depreciation and amortization improvement stemming from the cable segment organic growth, the recent acquisitions combined with lower income tax expenses resulting from the recent acquisitions tax structure,” the company reports.
For fiscal 2013, profit for the year from continuing operations amounted to $189.8 million compared to $174.2 million for fiscal 2012. Profit progression is mostly attributable to the improvement in the operating income before depreciation and amortization generated by the cable segment, partly offset by additional depreciation and amortization, financial expense and acquisition costs all related to the recent acquisitions. However, when adding the $55.4 million contributed last year when the company sold Portuguese unit Cabovisao, profit for the year of $189.8 million is down 17.3% compared to fiscal 2012.
Also seeing a dip are the number of customers in the company’s Canadian operations. The company lost 10,573 TV customers and 1,607 telephony customers in the fourth quarter while adding only 159 high speed internet customers – “mainly as a result of service category maturity, competitive offers and tightening of our customer qualifications,” says the release. The company has lost 28,344 TV service customers in Canada since the end of fiscal 2012, but has gained over 5,000 “primary service units”, which it identifies as cable+internet+phone, ending fiscal 2013 with a total of 1.98 million.
"Fiscal 2013 proved to be a strong financial year for Cogeco and its subsidiaries, during which good headway was made in positioning the business toward sustained profitable growth," said Louis Audet, president and CEO, in the release.
"Our Cogeco Cable subsidiary completed two acquisitions that allowed the Corporation, on the one hand, to diversify its cable assets geographically and, on the other hand, build a stronger footprint in the promising data hosting and managed IT services market. As a logical aftermath to its evolving portfolio, Cogeco Cable regrouped its Canadian cable operations under a self- standing operational unit, a move that will better facilitate continued excellence in product innovation and customer service to the benefit of its Canadian Digital Television, Telephony and HSI customers. All of this, along with the successful refinancing that was completed during a period of low interest rates, should enhance Cogeco Cable's financial performance in fiscal 2014," he continued.
The company’s Quebec radio and outdoor advertising subsidiary also fared well in fiscal 2013, “having completed the full integration of Cogeco Metromedia,” the CEO continued, “Today, we have the largest commercial talk radio network in the province of Quebec, attracting listeners who represent families among those with the highest per capita income profile very much sought after by advertisers. I am very pleased with our overall results and am optimistic about our ability to deliver on our 2014 projections with a steady performance our investors can count on.”
