- A quarterly 15-year record of 14,041 Internet service
customer net additions at Cogeco Connexion driven by organic
growth, new customers gained from network expansions and under the
oxio brand;
- Cogeco Communications added 23,031 homes passed in
Canada and the United States as part of its
fibre-to-the-home network expansion strategy. Total number of homes
passed for fiscal 2023 rose by almost 124,000, or 3.4%;
- Successfully completed the Québec subsidized network
expansions in October, subsequent to fiscal year end, connecting
180 municipalities;
- Revenue grew by 2.6% to $766.7
million compared to the same period of the prior
year;
- Adjusted EBITDA(1) of $351.9 million increased 1.0% over last
year;
- Profit for the period amounted to $90.5 million, a decrease of 18.7%, mainly due to
higher financial expense. Profit for the period attributable to
owners of the Corporation amounted to $29.2
million, a decrease of 19.8%;
- Free cash flow(1) amounted to $86.2 million compared to $34.7 million last year due to lower net capital
expenditures, while cash flows from operating activities decreased
by 12.9% to $284.4 million. Free cash
flow, excluding network expansion projects(1) was
$119.2 million, an increase of
23.7%;
- Cogeco is releasing its fiscal 2024 financial guidelines;
and
- Declared a quarterly eligible dividend of $0.854 per share, representing a 16.8% increase
over last year.
MONTRÉAL, Nov. 1, 2023
/CNW/ - Today, Cogeco Inc. (TSX: CGO) ("Cogeco" or the
"Corporation") announced its financial results for the fourth
quarter ended August 31, 2023.
"Our relentless focus on delivering high quality product
offerings and distinctive customer service to our customers was a
hallmark of fiscal 2023, resulting in healthy business performance
that offset challenges from the inflationary environment, increased
competition, and global economic uncertainty. Our ongoing
commitment to enhancing and expanding our network and service
offering with leading edge technology and multiple brands for new
and existing customers gives us confidence in our long-term growth
opportunities," said Philippe Jetté, President and Chief Executive
Officer of Cogeco Inc.
"Our Canadian telecommunications business performed solidly
again this quarter, as we delivered strong Internet customer
additions across each of our traditional, expansion and oxio
footprints," continued Mr. Jetté. "Though only a half year has
passed since we acquired oxio, we have been pleased with its
performance to date."
"While the economic and competitive environment in the U.S.
remains challenging, demand from customers for our higher speed
offerings has resulted in rising revenue per subscriber which has
helped offset customer losses at lower price points. Although
revenue declined, a more attractive product mix combined with our
focus on cost efficiencies and integration of easy to use,
self-install equipment, delivered a higher adjusted EBITDA margin
within our U.S. business," continued Mr. Jetté.
"Looking ahead, with our Québec expansion now complete, our
Ontario network expansion in its
early phases and Breezeline's network expansion ongoing, we expect
to continue to add new Internet customers in fiscal 2024, which
will contribute to our adjusted EBITDA and free cash flow in fiscal
2024 and beyond."
"In terms of our capital allocation, we continue to focus on the
growth of the business through network enhancement and expansion,
while developing our mobile offering in both countries. We remain
confident in our growth strategy and outlook, and furthermore, we
are committed to returning significant capital to our shareholders.
We are pleased to announce a 16.8% increase in the dividend today,
which brings the quarterly dividend per share to $0.854. With this increase, we have now closed
the gap in quarterly dividends between Cogeco and Cogeco
Communications' dividends, which is a process that has been
underway for three years."
"Cogeco Media's focus on financial discipline has remained
steadfast over the past year as the challenges facing the
traditional advertising markets have encouraged us to accelerate
the adoption of new innovative digital solutions as we move to a
multi-platform audio content model," continued Mr. Jetté. "Fiscal
2024 holds several exciting developments for us at Cogeco Media, as
we look to grow the already strong listener engagement held by many
of our stations over the past year. Finally, we are proud to
announce that our station 98.5 Montréal, remained in the top spot
of the Numeris rankings for its sixth consecutive quarter and once
again, recorded not only the highest radio listenership in Québec,
but the entire country."
"We are making significant strides in executing our
sustainability strategy. We do this through our long-standing
tradition of social engagement and community involvement,
prioritizing digital inclusion and climate action, implementing
leading operating practices and pursuing our responsible and
ethical management," Mr. Jetté concluded.
Consolidated Financial Highlights
Three months ended
August 31
|
2023
|
|
2022
|
|
Change
|
Change in
constant
currency
|
(1)
|
(In thousands of
Canadian dollars, except % and per share data)
(unaudited)
|
$
|
|
$
|
|
%
|
%
|
|
Revenue
|
766,652
|
|
746,911
|
|
2.6
|
1.0
|
|
Adjusted EBITDA
(1)
|
351,925
|
|
348,510
|
|
1.0
|
(0.6)
|
|
Profit for the
period
|
90,521
|
|
111,379
|
|
(18.7)
|
|
|
Profit for the period
attributable to owners of the Corporation
|
29,234
|
|
36,433
|
|
(19.8)
|
|
|
Adjusted profit
attributable to owners of the Corporation
(1)(3)
|
33,006
|
|
39,459
|
|
(16.4)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
284,370
|
|
326,636
|
|
(12.9)
|
|
|
Free cash flow
(1)
|
86,237
|
|
34,704
|
|
—
|
—
|
|
Free cash flow,
excluding network expansion projects (1)
|
119,165
|
|
96,336
|
|
23.7
|
23.4
|
|
|
|
|
|
|
|
|
|
Acquisition of
property, plant and equipment
|
207,434
|
|
244,855
|
|
(15.3)
|
|
|
Net capital
expenditures (1)(2)
|
178,481
|
|
224,775
|
|
(20.6)
|
(22.3)
|
|
Net capital
expenditures, excluding network expansion projects
(1)
|
145,553
|
|
163,143
|
|
(10.8)
|
(12.6)
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
1.87
|
|
2.31
|
|
(19.0)
|
|
|
Adjusted diluted
earnings per share (1) (3)
|
2.12
|
|
2.50
|
|
(15.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating results
For the fourth quarter of fiscal 2023:
- Revenue increased by 2.6% to $766.7
million. On a constant currency basis, revenue increased by
1.0%, driven by growth in the Canadian telecommunications segment
and higher revenue in the media activities, which were partly
offset by a decline in the American telecommunications segment, as
explained below:
- Canadian telecommunications' revenue increased by 4.1%, mainly
driven by the cumulative effect of high-speed Internet service
additions over the past year, higher revenue per customer and
contribution from the oxio acquisition completed on March 3, 2023.
- Revenue in the media activities increased by 8.3%.
- American telecommunications' revenue decreased by 2.5% in
constant currency (increase of 0.8% as reported), mainly due to a
lower Internet customer base over the past year and an overall
decline in video and phone service customers, offset in part by a
higher revenue per customer and a better product mix resulting from
customers subscribing to increasingly fast Internet speeds.
- Adjusted EBITDA increased by 1.0% to reach $351.9 million. On a constant currency basis,
adjusted EBITDA remained stable compared to the same period of the
prior year, mainly as a result of higher adjusted EBITDA in the
American telecommunications segment, which was offset by higher
corporate costs, primarily due to initiatives undertaken to support
the Corporation's future growth and in relation to its plan to
offer mobile services in Canada,
and lower adjusted EBITDA in the Canadian telecommunications
segment, as further explained below.
- American telecommunications adjusted EBITDA increased by 5.7%,
or 2.2% in constant currency, mainly resulting from a better
product mix and cost reduction initiatives, which more than offset
its revenue decline resulting from a lower customer base over the
past year as it continued to face headwinds from the macroeconomic
and nationwide competitive environments.
- Canadian telecommunications adjusted EBITDA decreased by 1.1%
or 0.9% in constant currency, mainly due to increased operating
expenses to drive and support customer growth, while last year's
operating expenses were also lower due to certain year-end
adjustments.
- Profit for the period amounted to $90.5
million, of which $29.2
million, or $1.87 per diluted
share, was attributable to owners of the Corporation compared to
$111.4 million, $36.4 million, and $2.31 per diluted share, respectively, in the
comparable period of fiscal 2022. The decreases in profit for the
period and profit attributable to owners of the Corporation
resulted mainly from higher financial expense, depreciation and
amortization expense, and acquisition, integration, restructuring
and other costs, partly offset by the impact of the appreciation of
the US dollar.
- Adjusted profit attributable to owners of the
Corporation(3) was $33.0
million, or $2.12 per diluted
share(3), compared to $39.5
million, or $2.50 per diluted
share, last year.
- Net capital expenditures, which account for network expansion
subsidies, were $178.5 million, a
decrease of 20.6% compared to $224.8
million in the same period of the prior year. In constant
currency, net capital expenditures(1) were $174.6 million, a decrease of 22.3% compared to
last year, mainly due to reduced spending in both the Canadian and
American telecommunications segments following the completion of
several rural network expansion projects, mainly in Québec, and the
timing of certain initiatives.
- Excluding network expansion projects, net capital expenditures
were $145.6 million, a decrease of
10.8% compared to $163.1 million in
the same period of the prior year. In constant currency, net
capital expenditures, excluding network expansion
projects(1) were $142.5
million, a decrease of 12.6% compared to last year.
- Fibre-to-the-home network expansion projects continued in both
Canada and the United States, with homes passed additions
of close to 196,000 over the past two fiscal years, of which close
to 124,000 were added in fiscal 2023, equating to an approximately
7% growth(4) in homes passed over the past two years.
These fibre-to-the-home network expansion projects are increasing
the Corporation's footprint in the provinces of Québec and
Ontario and in several areas
adjacent to Breezeline's network in the
United States.
- Acquisition of property, plant and equipment decreased by 15.3%
to $207.4 million, due to reduced
capital spending in both countries.
- Free cash flow amounted to $86.2
million, or $86.8 million in
constant currency, compared to $34.7
million last year. The increase in constant currency is
mainly due to lower net capital expenditures and lower current
income taxes, partly offset by higher financial expense.
- Free cash flow, excluding network expansion projects amounted
to $119.2 million, or $118.9 million in constant currency, an increase
of 23.7%, or 23.4% in constant currency, compared to the same
period of the prior year.
- Cash flows from operating activities decreased by 12.9% to
reach $284.4 million, mainly
resulting from higher interest paid and a lower net inflow in
non-cash operating activities mostly due to the timing of trade and
other payables.
- At its November 1, 2023 meeting,
the Board of Directors of Cogeco declared a quarterly eligible
dividend of $0.854 per share, an
increase of 16.8% compared to $0.731
per share last year. With this increase, the dividends per share of
the Corporation and Cogeco Communications are now fully
aligned.
__________
|
(1)
|
Adjusted EBITDA and net
capital expenditures are total of segments measures. Constant
currency basis, adjusted profit attributable to owners of the
Corporation, net capital expenditures, excluding network expansion
projects, free cash flow and free cash flow, excluding network
expansion projects are non-IFRS financial measures. Change in
constant currency and adjusted diluted earnings per share are
non-IFRS ratios. These indicated terms do not have
standardized definitions prescribed by International Financial
Reporting Standards ("IFRS") and, therefore, may not be comparable
to similar measures presented by other companies. For more
information on these financial measures, please consult the
"Non-IFRS and other financial measures" section of this press
release.
|
(2)
|
Net capital
expenditures are presented net of government subsidies, including
the utilization of those received in advance.
|
(3)
|
Excludes the impact of
acquisition, integration, restructuring and other costs, net of tax
and non-controlling interest.
|
(4)
|
Growth is calculated by
excluding additions resulting from acquisitions.
|
FISCAL 2024 FINANCIAL GUIDELINES
Cogeco released its fiscal 2024 financial guidelines. On a
constant currency basis, the Corporation expects fiscal 2024
revenue to remain stable. The Corporation anticipates revenue
growth in the Canadian telecommunications segment being offset by
lower revenue in the American telecommunications segment as it
continues to face competition in its markets, in part from fixed
wireless competitors, and video services cord cutting. On a
constant currency basis, fiscal 2024 adjusted EBITDA is anticipated
to remain stable, mainly as a result of stable revenue and an
improved product mix contributing to adjusted EBITDA margin,
combined with several cost optimization initiatives. The financial
guidelines reflect a negative estimated (1)% impact on adjusted
EBITDA compared to the prior year related to additional preparation
costs to offer mobility services in both countries. Net capital
expenditures are anticipated to be between $700 and $775
million, including net investments of approximately
$140 to $190
million in growth-oriented network expansions, which will
increase the Corporation's footprint in Canada and the
United States. As a result of these growth initiatives and
an anticipated increase in financial expense, free cash flow and
free cash flow, excluding network expansion projects, are expected
to decrease between (5)% and (15)%, which reflects an estimated
(10)% impact from additional mobility investments.
|
|
|
|
|
November 1,
2023
|
|
|
|
Projections
|
(1)
|
Actual
|
|
Fiscal
2024
(constant
currency)
|
(2)
|
Fiscal 2023
|
(In millions of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
|
|
|
Financial
guidelines
|
|
|
|
Revenue
|
Stable
|
|
3,081
|
Adjusted
EBITDA
|
Stable
|
|
1,433
|
Net capital
expenditures
|
$700 to
$775
|
|
703
|
Net capital
expenditures in connection with network expansion
projects
|
$140 to
$190
|
|
530
|
Free cash
flow
|
(5)% to
(15)%
|
(3)
|
421
|
Free cash flow,
excluding network expansion projects
|
(5)% to
(15)%
|
(3)
|
594
|
|
|
|
|
(1)
|
Percentage of changes
compared to fiscal 2023.
|
(2)
|
Fiscal 2024 financial
guidelines are based on a USD/CDN constant exchange rate of 1.3467
USD/CDN.
|
(3)
|
The assumed current
income tax effective rate is approximately 7%.
|
These financial guidelines, including the various assumptions
underlying them, contain forward-looking statements concerning the
business outlook for Cogeco, and should be read in conjunction with
the "Forward-looking statements" section of this press release.
Financial highlights
Three months and
years ended August 31
|
2023
|
2022
|
Change
|
Change in
constant
currency
|
(1)
(2)
|
2023
|
2022
|
Change
|
Change in
constant
currency
|
(1)
(2)
|
(In thousands of
Canadian dollars, except percentages and per share
data)
|
$
|
$
|
%
|
%
|
|
$
|
$
|
%
|
%
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
766,652
|
746,911
|
2.6
|
1.0
|
|
3,081,136
|
2,995,012
|
2.9
|
0.1
|
|
Adjusted EBITDA
(2)
|
351,925
|
348,510
|
1.0
|
(0.6)
|
|
1,432,929
|
1,405,588
|
1.9
|
(0.6)
|
|
Acquisition,
integration, restructuring and other costs
(3)
|
15,239
|
12,657
|
20.4
|
|
|
36,245
|
35,029
|
3.5
|
|
|
Impairment of goodwill
and intangible assets
|
—
|
—
|
—
|
|
|
88,000
|
—
|
—
|
|
|
Profit for the
period
|
90,521
|
111,379
|
(18.7)
|
|
|
350,235
|
457,755
|
(23.5)
|
|
|
Profit for the period
attributable to owners of the Corporation
|
29,234
|
36,433
|
(19.8)
|
|
|
70,630
|
149,108
|
(52.6)
|
|
|
Adjusted profit
attributable to owners of the Corporation
(2)(4)
|
33,006
|
39,459
|
(16.4)
|
|
|
149,298
|
156,684
|
(4.7)
|
|
|
Cash
flow
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
284,370
|
326,636
|
(12.9)
|
|
|
968,214
|
1,258,427
|
(23.1)
|
|
|
Free cash flow
(2)
|
86,237
|
34,704
|
—
|
—
|
|
421,430
|
433,181
|
(2.7)
|
(2.0)
|
|
Free cash flow,
excluding network expansion projects (2)
|
119,165
|
96,336
|
23.7
|
23.4
|
|
594,265
|
590,470
|
0.6
|
—
|
|
Acquisition of property, plant and
equipment
|
207,434
|
244,855
|
(15.3)
|
|
|
806,237
|
747,608
|
7.8
|
|
|
Net capital
expenditures (2)
|
178,481
|
224,775
|
(20.6)
|
(22.3)
|
|
702,913
|
691,866
|
1.6
|
(2.4)
|
|
Net capital
expenditures, excluding network expansion projects
(2)
|
145,553
|
163,143
|
(10.8)
|
(12.6)
|
|
530,078
|
534,577
|
(0.8)
|
(4.7)
|
|
Per share data
(5)
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
1.89
|
2.32
|
(18.5)
|
|
|
4.53
|
9.43
|
(52.0)
|
|
|
Diluted
|
1.87
|
2.31
|
(19.0)
|
|
|
4.51
|
9.37
|
(51.9)
|
|
|
Adjusted diluted
(2)(4)
|
2.12
|
2.50
|
(15.2)
|
|
|
9.53
|
9.85
|
(3.2)
|
|
|
Dividends per
share
|
0.731
|
0.625
|
17.0
|
|
|
2.924
|
2.500
|
17.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
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 rate of the comparable
periods of the prior year. For the three-month period and year
ended August 31, 2022, the average foreign exchange rates used for
translation were 1.2893 USD/CDN and 1.2718 USD/CDN,
respectively.
|
(2)
|
Adjusted EBITDA and net
capital expenditures are total of segments measures. Adjusted
profit attributable to owners of the Corporation, free cash flow,
free cash flow, excluding network expansion projects and net
capital expenditures, excluding network expansion projects are
non-IFRS financial measures. Change in constant currency and
adjusted diluted earnings per share are non-IFRS ratios. These
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 information on these
financial measures, please consult the "Non-IFRS and other
financial measures" section of this press release.
|
(3)
|
For the three-month
period and year ended August 31, 2023, acquisition, integration,
restructuring and other costs resulted mostly from costs related to
the ongoing integration of past acquisitions as well as acquisition
and integration costs incurred in connection with the acquisition
of oxio, completed on March 3, 2023, from restructuring costs
associated with organizational changes during the fourth quarter of
fiscal 2023 within the Canadian and the American telecommunications
segments and from configuration and customization costs related to
cloud computing arrangements. Furthermore, a retroactive adjustment
of $3.3 million was recognized during the third quarter of fiscal
2023, in addition to a $5.1 million adjustment recognized in the
second quarter, both related to the Copyright Board preliminary
conclusions of the 2016-2018 retransmission tariffs, impacting
those years and estimated costs for the following years. For the
three-month period and year ended August 31, 2022,
acquisition, integration, restructuring and other costs resulted
mostly from the integration of the Ohio broadband systems, from
restructuring costs associated with organizational changes during
the fourth quarter of fiscal 2022 within the Canadian
telecommunications segment, resulting in cost optimization, as well
as from costs associated with configuration and customization
related to cloud computing arrangements.
|
(4)
|
Excludes the impact of
non-cash impairment charges, and acquisition, integration,
restructuring and other costs, net of tax and non-controlling
interest.
|
(5)
|
Per multiple and
subordinate voting share.
|
As at
|
August 31,
2023
|
August 31,
2022
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
$
|
Financial
condition
|
|
|
Cash and cash
equivalents
|
363,854
|
379,001
|
Total assets
|
9,869,778
|
9,468,025
|
Long-term
debt
|
|
|
Current
|
43,325
|
340,468
|
Non-current
|
5,045,672
|
4,398,142
|
Net indebtedness
(1)
|
4,817,113
|
4,545,809
|
Equity attributable to
owners of the Corporation
|
925,863
|
919,843
|
Return on equity
(2)
|
7.7 %
|
17.2 %
|
|
|
|
(1)
|
Net indebtedness is a
capital management measure. For more information on this financial
measure, please consult the "Non-IFRS and other financial measures"
section of the Corporation's MD&A for the year ended
August 31, 2023, available on SEDAR+
at www.sedarplus.ca.
|
(2)
|
Return on equity is a
supplementary financial measure and is calculated as profit
attributable to owners of the Corporation for the year divided by
the average of the equity attributable to owners of the Corporation
for the year.
|
Forward-looking statements
Certain statements contained in this press
release may constitute forward-looking information within the
meaning of securities laws. Forward-looking information may relate
to Cogeco Inc.'s ("Cogeco" or the "Corporation") future outlook and
anticipated events, business, operations, financial performance,
financial condition or results and, in some cases, can be
identified by terminology such as "may"; "will"; "should";
"expect"; "plan"; "anticipate"; "believe"; "intend"; "estimate";
"predict"; "potential"; "continue"; "foresee", "ensure" or other
similar expressions concerning matters that are not historical
facts. Particularly, statements regarding the Corporation's
financial guidelines, future operating results and economic
performance, objectives and strategies are forward-looking
statements. These statements are based on certain factors and
assumptions including expected growth, results of operations,
purchase price allocation, tax rates, weighted average cost of
capital, performance and business prospects and opportunities,
which Cogeco believes are reasonable as of the current date. Refer
in particular to the "Corporate objectives and strategies" and
"Fiscal 2024 financial guidelines" sections of the Corporation's
2023 annual Management's Discussion and Analysis ("MD&A") for a
discussion of certain key economic, market and operational
assumptions we have made in preparing forward-looking statements.
While management considers these assumptions to be reasonable based
on information currently available to the Corporation, they may
prove to be incorrect. Forward-looking information is also subject
to certain factors, including risks and uncertainties that could
cause actual results to differ materially from what Cogeco
currently expects. These factors include risks such as competitive
risks (including changing competitive ecosystems and disruptive
competitive strategies adopted by our competitors), business risks,
regulatory risks, technology risks (including cybersecurity),
financial risks (including variations in currency and interest
rates), economic conditions (including inflation pressuring
revenue, reduced consumer spending and increasing costs), talent
management risks (including highly competitive market for limited
pool of digitally skilled employees), human-caused and natural
threats to the Corporation's network (including increased frequency
of extreme weather events with the potential to disrupt
operations), infrastructure and systems, community acceptance
risks, ethical behavior risks, ownership risks, litigation risks
and public health and safety, many of which are beyond the
Corporation's control. Moreover, the Corporation's radio operations
are significantly exposed to advertising budgets from the retail
industry, which can fluctuate due to changing economic conditions.
For more exhaustive information on these risks and uncertainties,
the reader should refer to the "Uncertainties and main risk
factors" section of the Corporation's 2023 annual MD&A. These
factors are not intended to represent a complete list of the
factors that could affect Cogeco and future events and results may
vary significantly from what management currently foresees. The
reader should not place undue importance on forward-looking
information contained in this press release which represent
Cogeco's expectations as of the date of this press release (or as
of the date they are otherwise stated to be made) and are subject
to change after such date. While management may elect to do so, the
Corporation is under no obligation (and expressly disclaims any
such obligation) and does not undertake to update or alter this
information at any particular time, whether as a result of new
information, future events or otherwise, except as required by
law.
All amounts are stated in Canadian dollars unless otherwise
indicated. This press release should be read in
conjunction with the MD&A included in the Corporation's 2023
Annual Report, the Corporation's consolidated financial statements
and the notes thereto prepared in accordance with the International
Financial Reporting Standards ("IFRS") for the year ended
August 31, 2023.
Non-IFRS and other financial measures
This press release includes references to non-IFRS and other
financial measures used by Cogeco. These financial measures are
reviewed in assessing the performance of Cogeco Communications and
used in the decision-making process with regard to its business
units.
Reconciliations between non-IFRS and other financial measures to
the most directly comparable IFRS financial measures are provided
below. Certain additional disclosures for non-IFRS and other
financial measures used in this press release have been
incorporated by reference and can be found in the "Non-IFRS and
other financial measures" section of the Corporation's MD&A for
the year ended August 31, 2023,
available on SEDAR+ at www.sedarplus.ca. The following
non-IFRS financial measures are used as a component of Cogeco's
non-IFRS ratios.
|
|
Specified non-IFRS
financial measure
|
Used in the
component of the following non-IFRS ratio
|
Adjusted profit
attributable to owners of the Corporation
|
Adjusted diluted
earnings per share
|
|
|
Financial measures presented on a constant currency basis for
the three-month period and year ended August 31, 2023 are
translated at the average foreign exchange rate of the comparable
periods of the prior year, which were 1.2893
USD/CDN and 1.2718 USD/CDN,
respectively.
Constant currency basis and foreign exchange impact
reconciliation
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
Three months ended
August 31
|
2023
|
|
Foreign
exchange
impact
|
|
2023
in constant
currency
|
|
2022
|
|
Actual
|
|
In
constant
currency
|
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
Revenue
|
766,652
|
|
(12,037)
|
|
754,615
|
|
746,911
|
|
2.6
|
|
1.0
|
|
Operating
expenses
|
414,727
|
|
(6,686)
|
|
408,041
|
|
398,401
|
|
4.1
|
|
2.4
|
|
Adjusted
EBITDA
|
351,925
|
|
(5,351)
|
|
346,574
|
|
348,510
|
|
1.0
|
|
(0.6)
|
|
Free cash
flow
|
86,237
|
|
599
|
|
86,836
|
|
34,704
|
|
—
|
|
—
|
|
Net capital
expenditures
|
178,481
|
|
(3,906)
|
|
174,575
|
|
224,775
|
|
(20.6)
|
|
(22.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
Years ended August
31
|
2023
|
|
Foreign
exchange
impact
|
|
2023
in constant
currency
|
|
2022
|
|
Actual
|
|
In
constant
currency
|
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
Revenue
|
3,081,136
|
|
(83,268)
|
|
2,997,868
|
|
2,995,012
|
|
2.9
|
|
0.1
|
|
Operating
expenses
|
1,648,207
|
|
(47,115)
|
|
1,601,092
|
|
1,589,424
|
|
3.7
|
|
0.7
|
|
Adjusted
EBITDA
|
1,432,929
|
|
(36,153)
|
|
1,396,776
|
|
1,405,588
|
|
1.9
|
|
(0.6)
|
|
Free cash
flow
|
421,430
|
|
2,952
|
|
424,382
|
|
433,181
|
|
(2.7)
|
|
(2.0)
|
|
Net capital
expenditures
|
702,913
|
|
(27,345)
|
|
675,568
|
|
691,866
|
|
1.6
|
|
(2.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian telecommunications segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
Three months ended
August 31
|
2023
|
|
Foreign
exchange
impact
|
|
2023
in constant
currency
|
|
2022
|
|
Actual
|
|
In
constant
currency
|
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
Revenue
|
375,754
|
|
—
|
|
375,754
|
|
360,834
|
|
4.1
|
|
4.1
|
|
Operating
expenses
|
180,183
|
|
(367)
|
|
179,816
|
|
163,157
|
|
10.4
|
|
10.2
|
|
Adjusted
EBITDA
|
195,571
|
|
367
|
|
195,938
|
|
197,677
|
|
(1.1)
|
|
(0.9)
|
|
Net capital
expenditures
|
73,348
|
|
(614)
|
|
72,734
|
|
100,140
|
|
(26.8)
|
|
(27.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
Years ended August
31
|
2023
|
|
Foreign
exchange
impact
|
|
2023
in constant
currency
|
|
2022
|
|
Actual
|
|
In
constant
currency
|
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
Revenue
|
1,489,915
|
|
—
|
|
1,489,915
|
|
1,440,276
|
|
3.4
|
|
3.4
|
|
Operating
expenses
|
701,717
|
|
(2,425)
|
|
699,292
|
|
665,732
|
|
5.4
|
|
5.0
|
|
Adjusted
EBITDA
|
788,198
|
|
2,425
|
|
790,623
|
|
774,544
|
|
1.8
|
|
2.1
|
|
Net capital
expenditures
|
354,384
|
|
(9,091)
|
|
345,293
|
|
336,104
|
|
5.4
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American telecommunications segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
Three months ended
August 31
|
2023
|
|
Foreign
exchange
impact
|
|
2023
in constant
currency
|
|
2022
|
|
Actual
|
|
In
constant
currency
|
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
Revenue
|
367,643
|
|
(12,037)
|
|
355,606
|
|
364,612
|
|
0.8
|
|
(2.5)
|
|
Operating
expenses
|
193,172
|
|
(6,319)
|
|
186,853
|
|
199,561
|
|
(3.2)
|
|
(6.4)
|
|
Adjusted
EBITDA
|
174,471
|
|
(5,718)
|
|
168,753
|
|
165,051
|
|
5.7
|
|
2.2
|
|
Net capital
expenditures
|
100,488
|
|
(3,292)
|
|
97,196
|
|
120,347
|
|
(16.5)
|
|
(19.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
Years ended August
31
|
2023
|
|
Foreign
exchange
impact
|
|
2023
in constant
currency
|
|
2022
|
|
Actual
|
|
In
constant
currency
|
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
Revenue
|
1,494,213
|
|
(83,268)
|
|
1,410,945
|
|
1,460,378
|
|
2.3
|
|
(3.4)
|
|
Operating
expenses
|
800,409
|
|
(44,690)
|
|
755,719
|
|
783,704
|
|
2.1
|
|
(3.6)
|
|
Adjusted
EBITDA
|
693,804
|
|
(38,578)
|
|
655,226
|
|
676,674
|
|
2.5
|
|
(3.2)
|
|
Net capital
expenditures
|
336,910
|
|
(18,254)
|
|
318,656
|
|
348,176
|
|
(3.2)
|
|
(8.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted profit attributable to owners of the
Corporation
|
|
|
|
|
|
Three months ended
August 31
|
Years ended August
31
|
|
2023
|
2022
|
2023
|
2022
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
Profit for the
period attributable to owners of the Corporation
|
29,234
|
36,433
|
70,630
|
149,108
|
Acquisition,
integration, restructuring and other costs
|
15,239
|
12,657
|
36,245
|
35,029
|
Impairment of goodwill
and intangible assets
|
—
|
—
|
88,000
|
—
|
Tax impact for the
above items
|
(3,832)
|
(3,312)
|
(27,770)
|
(9,062)
|
Non-controlling
interest impact for the above items
|
(7,635)
|
(6,319)
|
(17,807)
|
(18,391)
|
Adjusted profit
attributable to owners of the Corporation
|
33,006
|
39,459
|
149,298
|
156,684
|
|
|
|
|
|
Free cash flow reconciliation
|
|
|
|
|
|
Three months ended
August 31
|
Years ended August
31
|
|
2023
|
2022
|
2023
|
2022
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
Cash flows from
operating activities
|
284,370
|
326,636
|
968,214
|
1,258,427
|
Amortization of
deferred transaction costs and discounts on long-term debt
(1)
|
3,212
|
2,992
|
12,672
|
11,888
|
Changes in other
non-cash operating activities
|
(12,970)
|
(36,411)
|
102,422
|
(81,883)
|
Income taxes
paid
|
2,190
|
7,404
|
91,968
|
39,168
|
Current income
taxes
|
(5,523)
|
(27,362)
|
(31,973)
|
(70,711)
|
Interest
paid
|
66,544
|
40,603
|
243,321
|
163,663
|
Financial
expense
|
(71,198)
|
(53,010)
|
(255,010)
|
(189,914)
|
Net capital
expenditures
|
(178,481)
|
(224,775)
|
(702,913)
|
(691,866)
|
Repayment of lease
liabilities
|
(1,907)
|
(1,373)
|
(7,271)
|
(5,591)
|
Free cash
flow
|
86,237
|
34,704
|
421,430
|
433,181
|
|
|
|
|
|
(1)
|
Included within
financial expense.
|
Net capital expenditures reconciliation
|
|
|
|
|
|
Three months ended
August 31
|
Years ended August
31
|
|
2023
|
2022
|
2023
|
2022
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
Acquisition of
property, plant and equipment
|
207,434
|
244,855
|
806,237
|
747,608
|
Subsidies received in
advance recognized as a reduction of the cost of
property, plant and equipment during the
period
|
(28,953)
|
(20,080)
|
(103,324)
|
(55,742)
|
Net capital
expenditures
|
178,481
|
224,775
|
702,913
|
691,866
|
|
|
|
|
|
Adjusted EBITDA reconciliation
|
|
|
|
|
|
Three months ended
August 31
|
Years ended August
31
|
|
2023
|
2022
|
2023
|
2022
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
Profit for the
period
|
90,521
|
111,379
|
350,235
|
457,755
|
Income taxes
|
17,827
|
17,353
|
78,379
|
97,287
|
Financial
expense
|
71,198
|
53,010
|
255,010
|
189,914
|
Impairment of goodwill
and intangible assets
|
—
|
—
|
88,000
|
—
|
Depreciation and
amortization
|
157,140
|
154,111
|
625,060
|
625,603
|
Acquisition,
integration, restructuring and other costs
|
15,239
|
12,657
|
36,245
|
35,029
|
Adjusted
EBITDA
|
351,925
|
348,510
|
1,432,929
|
1,405,588
|
|
|
|
|
|
Net capital expenditures and free cash flow excluding network
expansion projects reconciliations
Net capital expenditures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
Three months ended
August 31
|
2023
|
|
Foreign
exchange
impact
|
|
2023
in constant
currency
|
|
2022
|
|
Actual
|
|
In
constant
currency
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
Net capital
expenditures
|
178,481
|
|
(3,906)
|
|
174,575
|
|
224,775
|
|
(20.6)
|
|
(22.3)
|
Net capital
expenditures in connection with network expansion
projects
|
32,928
|
|
(890)
|
|
32,038
|
|
61,632
|
|
(46.6)
|
|
(48.0)
|
Net capital
expenditures, excluding network expansion projects
|
145,553
|
|
(3,016)
|
|
142,537
|
|
163,143
|
|
(10.8)
|
|
(12.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
Years ended August
31
|
2023
|
|
Foreign
exchange
impact
|
|
2023
in constant
currency
|
|
2022
|
|
Actual
|
|
In
constant
currency
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
Net capital
expenditures
|
702,913
|
|
(27,345)
|
|
675,568
|
|
691,866
|
|
1.6
|
|
(2.4)
|
Net capital
expenditures in connection with network expansion
projects
|
172,835
|
|
(6,550)
|
|
166,285
|
|
157,289
|
|
9.9
|
|
5.7
|
Net capital
expenditures, excluding network expansion projects
|
530,078
|
|
(20,795)
|
|
509,283
|
|
534,577
|
|
(0.8)
|
|
(4.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
Three months ended
August 31
|
2023
|
|
Foreign
exchange
impact
|
|
2023
in constant
currency
|
|
2022
|
|
Actual
|
|
In
constant
currency
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
Free cash
flow
|
86,237
|
|
599
|
|
86,836
|
|
34,704
|
|
—
|
|
—
|
Net capital
expenditures in connection with network expansion
projects
|
32,928
|
|
(890)
|
|
32,038
|
|
61,632
|
|
(46.6)
|
|
(48.0)
|
Free cash flow,
excluding network expansion projects
|
119,165
|
|
(291)
|
|
118,874
|
|
96,336
|
|
23.7
|
|
23.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
Years ended August
31
|
2023
|
|
Foreign
exchange
impact
|
|
2023
in constant
currency
|
|
2022
|
|
Actual
|
|
In
constant
currency
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
Free cash
flow
|
421,430
|
|
2,952
|
|
424,382
|
|
433,181
|
|
(2.7)
|
|
(2.0)
|
Net capital
expenditures in connection with network expansion
projects
|
172,835
|
|
(6,550)
|
|
166,285
|
|
157,289
|
|
9.9
|
|
5.7
|
Free cash flow,
excluding network expansion projects
|
594,265
|
|
(3,598)
|
|
590,667
|
|
590,470
|
|
0.6
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional information
Additional information relating to the Corporation, including
its Annual Information Form, is available on SEDAR+ at
www.sedarplus.ca and on the Corporation's website at
corpo.cogeco.com.
About Cogeco Inc.
Rooted in the communities it serves, Cogeco Inc. is a growing
competitive force in the North American telecommunications and
media sectors, serving 1.6 million residential and business
customers. Its Cogeco Communications Inc. subsidiary provides
Internet, video and phone services in Canada as well as in thirteen states in
the United States through its
business units Cogeco Connexion and Breezeline. Through Cogeco
Media, it owns and operates 21 radio stations primarily in the
province of Québec as well as a news agency. Cogeco's subordinate
voting shares are listed on the Toronto Stock Exchange (TSX: CGO).
The subordinate voting shares of Cogeco Communications Inc. are
also listed on the Toronto Stock Exchange (TSX: CCA).
For information:
Investors
Patrice
Ouimet
Senior Vice President and Chief Financial Officer
Cogeco Inc.
Tel.: 514-764-4600
patrice.ouimet@cogeco.com
Troy Crandall
Head, Investor Relations
Cogeco Inc.
Tel.: 514-764-4700
troy.crandall@cogeco.com
Media
Marie-Hélène Labrie
Senior Vice President and Chief Public Affairs,
Communications and Strategy Officer
Cogeco Inc.
Tel.: 514-764-4600
marie-helene.labrie@cogeco.com
Conference
Call:
|
Thursday, November
2nd, 2023 at 11:00 a.m. (Eastern Time)
|
|
|
|
The conference call
will be available on Cogeco's website
at https://corpo.cogeco.com/cgo/en/investors/investor-relations/.
Financial analysts will be able to access the conference call and
ask questions. Media representatives may attend as listeners only.
The conference replay will be available on Cogeco's website for a
three-month period.
|
|
Please use the
following dial-in number to access the conference call 10
minutes before the start of the conference:
|
|
|
|
Local -
Toronto: 1 416-764-8658
|
|
Toll Free - North
America: 1 888-886-7786
|
To join this conference call, participants are required to
provide the operator with the name of the company hosting the call,
that is, Cogeco Inc. or Cogeco Communications Inc.
SOURCE Cogeco Inc.