Cogeco Communications Releases Its Results for the Fourth Quarter of Fiscal 2019
- Revenue increased by 3.1% (2.7% in constant currency) compared to the same period of the prior year to reach $583.7 million;
- Adjusted EBITDA(1) reached $275.6 million, an increase of 4.6% (4.3% in constant currency);
- Free cash flow(1) increased by 76.5% (76.9% in constant currency) to reach $84.3 million; and
- A quarterly eligible dividend of $0.58 was declared, compared to $0.525 for the fourth quarter of fiscal 2018.
Montréal, October 30, 2019 – Today, Cogeco Communications Inc. (TSX: CCA) ("Cogeco Communications" or the "Corporation") announced its financial results for the fourth quarter ended August 31, 2019, in accordance with International Financial Reporting Standards ("IFRS").
Following Cogeco Communications' completion, on April 30, 2019, of the sale of Cogeco Peer 1 Inc., its Business information and communications technology ("Business ICT") services subsidiary, the operating and financial results from this subsidiary for the current and comparable periods are presented as discontinued operations separate from the Corporation's continuing operations.
For the fourth quarter of fiscal 2019:
- Revenue increased by 3.1% compared to the same period of the prior year to reach $583.7 million mainly driven by the growth of 7.0% in the American broadband services segment. On a constant currency basis, revenue increased by 2.7%, mainly explained as follows:
- American broadband services revenue increased by 6.0% in constant currency resulting from rate increases implemented in August 2018, the activation of bulk properties in Florida during the fourth quarter of fiscal 2019, the continued growth in Internet service customers as well as the acquisition of the south Florida fibre network previously owned by FiberLight, LLC (the "FiberLight acquisition") on October 3, 2018. The increase was partly offset by a decrease in telephony service customers.
- Canadian broadband services revenue remained stable as a result of rate increases and growth in Internet and commercial services, partly offset by decreases in video and telephony services customers compared to the same period of the prior year primarily due to issues resulting from the implementation of a new customer management system in the second half of fiscal 2018.
- Adjusted EBITDA increased by 4.6% to reach $275.6 million. On a constant currency basis, adjusted EBITDA increased by 4.3%, mainly as a result of the following:
- American broadband services adjusted EBITDA increased by 4.1% in constant currency mainly as a result of strong organic growth combined with the impact of the FiberLight acquisition.
- Canadian broadband services adjusted EBITDA increased by 3.6% in constant currency mainly from a decline in operating expenses.
- Profit for the period from continuing operations amounted to $92.4 million, of which $87.9 million, or $1.78 per share, was attributable to owners of the Corporation compared, respectively, to $75.9 million, $72.8 million, and $1.48 per share, in the comparable period of fiscal 2018. The increase resulted mainly from higher adjusted EBITDA combined with the decrease in financial expense;
- Profit for the period amounted to $94.3 million, of which $89.8 million, or $1.82 per share, was attributable to owners of the Corporation compared, respectively, to $74.8 million, $71.7 million, and $1.45 per share, in the comparable period of fiscal 2018. The variation is mainly due to a higher profit from continuing operations combined with a profit from discontinued operations;
- Free cash flow, from continuing operations, increased by 76.5% to reach $84.3 million. On a constant currency basis, free cash flow increased by 76.9% as a result of higher adjusted EBITDA combined with the decreases in acquisitions of property, plant and equipment and financial expense;
- Cash flow from operating activities increased by 19.3% to reach $304.7 million mainly due to higher adjusted EBITDA, the decreases in income taxes paid and financial expense paid and the increase in changes in non-cash operating activities primarily due to changes in working capital; and
- At its October 30, 2019 meeting, the Board of Directors of Cogeco Communications declared a quarterly eligible dividend of $0.58 compared to $0.525 per share in the fourth quarter of fiscal 2018.
"As we report our results of the last quarter of fiscal year 2019 we are pleased with Cogeco Communications’ overall performance," declared Philippe Jetté, President and Chief Executive Officer of Cogeco Communications Inc.
"Cogeco Connexion's adjusted EBITDA increased in the fourth quarter compared to last year thanks to our cost optimization efforts," added Mr. Jetté. "I am also pleased to report that our Canadian broadband services segment experienced a stabilization of its primary service units, made good progress with its digitization activities and is getting ready to launch its IPTV platform."
"We continue to be very satisfied with results at Atlantic Broadband," concluded Mr. Jetté. "Our American broadband services segment closed the fiscal year with healthy increases in revenue, adjusted EBITDA and primary service units. We are pleased with our expansion in the Florida market and are looking for more acquisitions now that our recent acquisitions are fully integrated."
(1) The indicated terms do not have standardized definitions prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other companies. For more details, please consult the "Non-IFRS financial measures" section of the MD&A.
Fiscal 2020 Financial Guidelines
Cogeco Communications maintains its 2020 preliminary financial guidelines as issued on July 10, 2019. Please consult the "Fiscal 2020 financial guidelines" section of the Corporation's 2019 Annual Report for further details.
ABOUT COGECO COMMUNICATIONS
Cogeco Communications Inc. is a communications corporation. It is the 8th largest cable operator in North America, operating in Canada under the Cogeco Connexion name in Québec and Ontario, and along the East Coast of the United States under the Atlantic Broadband brand (in 11 states from Maine to Florida). The Corporation provides residential and business customers with Internet, video and telephony services through its two-way broadband fibre networks. Cogeco Communications Inc.’s subordinate voting shares are listed on the Toronto Stock Exchange (TSX: CCA).
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Source: Cogeco Communications Inc.
Senior Vice President and Chief Financial Officer
Senior Vice-President, Chief Public Affairs and Communications Officer
Analyst Conference Call:
Thursday, October 31, 2019 at 11:00 a.m. (Eastern Daylight Time)
Media representatives may attend as listeners only.
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