Canadian broadband revenue slips
MONTREAL –Cogeco Communications reported Wednesday evening third quarter revenue increased by 3.6% to reach $587.3 million, mainly driven by the 10% growth in its American broadband services segment.
On a constant currency basis, revenue increased by 1.7% in the period ended May 31, 2019.
American broadband services revenue increased by 5.4%, resulting from rate increases implemented in August 2018, the continued growth in Internet and telephony services customers as well as the acquisition in late 2018 of the south Florida fibre network previously owned by FiberLight. The increase was partly offset by a decrease in video service customers;
Canadian broadband services revenue decreased by 1% mainly as a result of declines in video and telephony services customers during the fourth quarter of fiscal 2018 and the first quarter of fiscal 2019, reads the release. This was partially due to the bumpy transition to a new customer management system which the company says is now complete.
Adjusted EBITDA increased by 6% to reach $283.9 million. On a constant currency basis, adjusted EBITDA increased by 4.3%.
Canadian broadband services adjusted EBITDA increased by 3.6% in constant currency mainly as a result of a reduction in operating expenses, adds the press release.
Profit for the period from continuing operations (this excludes the now-sold Cogeco Peer 1 division) amounted to $99.6 million in the quarter compared, respectively, to $70.5 million in the same quarter of fiscal 2018. The increase resulted mainly from higher adjusted EBITDA combined with the decrease in financial expense, partly offset by increases in income taxes and in depreciation and amortization, reads the release.
Free cash flow from continuing operations, increased by 33.8% to $137 million.
Cogeco also released its fiscal 2020 preliminary financial guidelines, saying on a constant currency basis, it expects fiscal 2020 revenue to grow between 2% and 4%, adjusted EBITDA between 2.5% and 4.5%, acquisition of property, plant and equipment should reach between $460 million and $480 million and free cash flow is expected to grow between 5% and 11%.
“Once again we are very satisfied with our overall quarterly performance as the results of the third quarter of fiscal 2019 are in line with expectations,” said Philippe Jetté, president and CEO.
“At Atlantic Broadband, we continue to see solid organic growth… We are seeing the benefits of our amplified marketing activities with a significant increase in our primary service units, demonstrating our American broadband services segment’s position as a growth driver.”
