Cogeco Communications Releases its Financial Results for the Second Quarter of Fiscal 2021
- Revenue increased by 8.2% (9.8% in constant currency(1)) compared to the same period of the prior year to reach $634.5 million;
- Adjusted EBITDA(1) reached $307.0 million, an increase of 10.7% (12.2% in constant currency);
- Free cash flow(1) reached $142.8 million, an increase of 14.2% (14.6% in constant currency);
- Cogeco Communications announced the acceleration of high-speed Internet network expansion in Québec in collaboration with the provincial and federal governments;
- Cogeco Communications completed the acquisition of DERYtelecom, the third largest cable provider in the province of Québec; and
- A quarterly eligible dividend of $0.64 was declared.
MONTRÉAL, April 13, 2021 /CNW Telbec/ - Today, Cogeco Communications Inc. (TSX: CCA) ("Cogeco Communications" or the "Corporation") announced its financial results for the second quarter ended February 28, 2021, in accordance with International Financial Reporting Standards ("IFRS").
For the second quarter of fiscal 2021:
- Revenue increased by 8.2% to reach $634.5 million. On a constant currency basis, revenue increased by 9.8%, mainly explained as follows:
- Canadian broadband services revenue increased by 10.1% as a result of the DERYtelecom acquisition completed on December 14, 2020, the cumulative effect of sustained demand for residential high speed Internet since the beginning of the pandemic, and rate increases implemented for certain services, partly offset by a decline in video service customers. Excluding the acquisition of DERYtelecom, revenue in constant currency increased by 2.9%.
- American broadband services revenue increased by 9.5% in constant currency resulting mainly from a higher Internet service customer base, rate increases implemented for certain services and the impact of the Thames Valley Communications acquisition completed on March 10, 2020. Excluding the acquisition of Thames Valley Communications, revenue in constant currency increased by 8.0%
- Adjusted EBITDA increased by 10.7% to reach $307.0 million. On a constant currency basis, adjusted EBITDA increased by 12.2%, mainly explained as follows:
- Canadian broadband services adjusted EBITDA increased by 11.2% in constant currency mainly resulting from revenue growth and the impact of the DERYtelecom acquisition. Excluding the acquisition of DERYtelecom, adjusted EBITDA in constant currency increased by 4.7%.
- American broadband services adjusted EBITDA increased by 12.4% in constant currency mainly resulting from revenue growth and the impact of the Thames Valley Communications acquisition. Excluding the acquisition of Thames Valley Communications, adjusted EBITDA in constant currency increased by 11.0%.
- Profit for the period amounted to $110.6 million, of which $102.9 million, or $2.16 per share, was attributable to owners of the Corporation compared to $114.0 million, $109.4 million, and $2.24 per share, respectively, in the comparable period of fiscal 2020. The decrease resulted mainly from the increase in financial expense, mostly due to a $22.9 million non-cash gain on debt modification recognized during the second quarter of fiscal 2020, and higher income taxes expense, partly offset by higher adjusted EBITDA;
- Free cash flow increased by 14.2% to reach $142.8 million. On a constant currency basis, free cash flow increased by 14.6% as a result of higher adjusted EBITDA, partly offset by the increase in current income taxes;
- Cash flows from operating activities reached $231.2 million, comparable to the same period of the prior year;
- On December 14, 2020, Cogeco Connexion completed the acquisition of DERYtelecom, the third largest cable operator in the province of Québec, for a purchase price of $403 million, subject to customary post-closing adjustments; and
- At its April 13, 2021 meeting, the Board of Directors of Cogeco Communications declared a quarterly eligible dividend of $0.64 per share compared to $0.58 per share in the comparable quarter of fiscal 2020.
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 this press release, including reconciliation to the most comparable IFRS financial measures.
"For the second quarter of fiscal 2021, we are pleased with Cogeco Communications' overall performance, which includes continued growth in revenue and adjusted EBITDA," declared Philippe Jetté, President and Chief Executive Officer of Cogeco Communications Inc.
"In our Canadian broadband segment, we have seen growth in our customer base, with many opting for a mix of services or upgrading their existing services, highlighting the importance of our fixed broadband product at this time," said Mr. Jetté. "Our team at Cogeco Connexion has also been hard at work with the integration of DERYtelecom and the announcement to extend high-speed Internet access in 13 regions across Québec in partnership with the Government of Canada and the Government of Québec. The government funding support is excellent news, as we continue supporting our communities and contributing to the economic vitality of regional areas."
"At Atlantic Broadband, customer growth has been strong, underscoring our Broadband First strategy, offering best-in-class managed WiFi and transparent everyday pricing," added Mr. Jetté.
"We also received important recognition during this last quarter for our continued efforts around corporate social responsibility, and environmental, social and corporate governance, having been named among Corporate Knights' Global 100 Most Sustainable Corporations for a second year in a row, as well as having our ambitious new emission reduction targets gain approval from the Science Based Targets Initiative," concluded Mr. Jetté.
The COVID-19 pandemic continued to impact our day-to-day operations. Our priority remained on ensuring the well-being of our employees, customers and business partners. During the first half of fiscal 2021, we continued to experience some of the trends from past quarters. Those primarily relate to sustained demand for our residential high speed Internet product, due to customers spending more time at home for work, online education and entertainment purposes, and a reduction of certain expenses due to a more stable customer base (fewer connections and disconnections) and not being able to use all usual sales channels. In these unusual circumstances, we have also decided to delay certain sales and marketing expenses to the second half of the year in both countries. We expect that the current "work-from-home" trend will continue after the COVID-19 pandemic, where more workers will work from home than pre-pandemic on a partial or full-time basis. Although we are pleased with the financial results to date under the circumstances, we remain cautious in our management of this situation as uncertainties remain on the potential human, operating and financial impact of the pandemic. The Corporation's results discussed herein may not be indicative of future operational trends and financial performance.
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).
Wednesday, April 14, 2021 at 11:00 a.m. (Eastern Daylight Time)
A live audio webcast will be available on Cogeco Communications' website at https://corpo.cogeco.com/cca/en/investors/investor-relations/. The webcast will be available on Cogeco Communications' website for a three-month period. Members of the financial community will be able to access the conference call and ask questions. Media representatives may attend as listeners only.
Please use the following dial-in number to have access to the conference call 5 to 10 minutes before the start of the conference:
Canada/United States Access Number: 1-877-291-4570
International Access Number: 1-647-788-4919
In order to join this conference, participants are required to provide the operator with the name of the company hosting the call, that is, Cogeco Inc. or Cogeco Communications Inc.
Senior Vice President and Chief Financial Officer
Cogeco Communications Inc.
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Communications and Strategy Officer
Cogeco Communications Inc.
Three months ended
Six months ended
(In thousands of Canadian
Adjusted EBITDA (2)
Adjusted EBITDA margin (2)
Integration, restructuring and acquisition costs (3)
Profit for the period
Profit for the period attributable to owners of the Corporation
Cash flows from operating activities
Acquisition of property, plant and equipment (4)
Free cash flow (2)
Capital intensity (2)
Financial condition (5)
Cash and cash equivalents
Equity attributable to owners of the Corporation
Per share data (7)
Earnings per share
Key performance indicators presented on a constant currency basis are obtained by translating financial results from the current periods denominated in US dollars at the foreign exchange rates of the comparable periods of the prior year. For the three and six-month periods ended February 29, 2020, the average foreign exchange rates used for translation were 1.3182 USD/CDN and 1.3203 USD/CDN, respectively.
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, including reconciliation to the most comparable IFRS financial measures.
For the three and six-month periods ended February 28, 2021, integration, restructuring and acquisition costs resulted mostly from the acquisition and integration of DERYtelecom, which was completed on December 14, 2020. For the three and six-month periods ended February 29, 2020, integration, restructuring and acquisition costs resulted primarily from organizational changes initiated across the Corporation resulting in cost optimization, as well as the acquisition and integration of Thames Valley Communications, which was completed on March 10, 2020.
For the three and six-month periods ended February 28, 2021, acquisition of property, plant and equipment in constant currency amounted to $117.9 million and $234.5 million, respectively.
At February 28, 2021 and August 31, 2020.
Indebtedness is defined as the total of bank indebtedness and principal on long-term debt.
Per multiple and subordinate voting share.
SOURCE Cogeco Communications Inc.