MONTREAL – Cogeco Cable’s third quarter results, like most cable results of late, shows fast growth in telephony subscribers.
The company added 15,400 voice customers in the third quarter of fiscal 2006, ended May 31st, and is connecting 1,600 per week, said company CEO Louis Audet, during a conference call Monday morning. And, the company only passes about 50% of its customers with its voice over IP offering. "We are very satisfied with the third quarter results," said Louis Audet, Cogeco’s president and CEO.
Coverage will be at 75% by the end of August and 90% by the end of the calendar year, he added.
Audet also announced that by the end of July, high speed Internet customers will see quicker download speeds of 10 Mbps – and Ontario customers will also see a $3 rate increase too, in August, to $47.95 a month.
Add the telephony growth to digital customer expansion and more high speed Internet additions and Cogeco Cable added over 48,000 revenue generating units (cable plus digital plus Internet plus phone), compared to 6,400 for the same period last year, driving a revenue increase of 9.9% to $154 million. Operating income before amortization has improved by 8.5% to $63.2 million compared to Q3 ’05 while net income jumped by 50% to stand at $12.4 million.
The good news prompted a revision in the company’s guidance. "Our operations continue to improve, exceeding most of our projections. Therefore, we have revised our 2006 guidelines, setting our revenue expectations to about $600 million, operating income before amortization to approximately $245 million and free cash flow should remain between $20 million and $25 million", said Audet.
While a good chunk of the analyst call this morning surrounded the company’s Portuguese purchase, Audet declined to talk more about it pending final approval of the sale.
However, reflecting the company’s good news on the Canadian front and the analysts’ general displeasure with Cogeco’s move across the pond, one analyst added: "It hardly seems necessary to go to Portugal with that kind of growth (in Canada)."
– Greg O’Brien
