- New operating model focused on customer experience and operational excellence to power future growth.
- Expanded our customer value proposition with Breezeline Mobile launched across most of Breezeline's U.S. broadband footprint.
- Revenue increased by 1.3% compared to the same period last year to $777.2 million, reflecting revenue growth at Cogeco Connexion and stable revenue at Breezeline, in line with expectations.
- Adjusted EBITDA(1) of $369.8 million increased by 4.0% over last year.
- Profit for the period amounted to $75.3 million, an increase of $42.0 million, of which $19.0 million was attributable to owners of the Corporation.
- Earnings per share on a diluted basis rose to $1.97 from a loss of $2.22 in the third quarter of fiscal 2023, while adjusted diluted earnings per share(1)(3) rose by 24.3% to $3.02, which excludes the impact of last year's pre-tax non-cash impairment charges, restructuring and certain other costs.
- Free cash flow(1) amounted to $89.3 million, a decrease of 16.9% compared to last year reflecting restructuring costs recognized during the quarter, while cash flow from operating activities increased by 18.3% to $335.1 million due to the timing of certain working capital items. Free cash flow, excluding network expansion projects(1) decreased by 18.3% to $113.7 million.
- Cogeco maintains its fiscal 2024 financial guidelines.
- A quarterly dividend of $0.854 per share was declared, representing a 16.8% increase over the prior year.
MONTRÉAL, July 11, 2024 /CNW/ - Today, Cogeco Inc. (TSX: CGO) ("Cogeco" or the "Corporation") announced its financial results for the third quarter ended May 31, 2024.
"We demonstrated solid performance again in the third quarter of 2024, with revenue growth and healthy expansion of our adjusted EBITDA margin due to an improving product mix, combined with an acceleration of our efforts to drive operational efficiency," said Frédéric Perron, President and CEO. "In the third quarter, we implemented the initial steps of a new operating model designed to deliver future growth and increase our focus on customer experience and operational excellence.
"Growth in our Canadian telecommunications business was driven by the ongoing expansion of our Internet subscriber base under our Cogeco Connexion and oxio brands. We continue to be impressed by oxio's performance and its robust adoption by consumers and are cascading our learnings from this digital brand across our organization.
"In the U.S., we rolled out Breezeline Mobile across most of our footprint, which will provide an even stronger incentive for new and existing customers to bundle their digital services with us. In addition, our Internet-first strategy and persistent endeavors to drive operational efficiency helped deliver adjusted EBITDA growth over last year.
"At Cogeco Media, our innovative digital solutions and multi-platform digital content helped generate another quarter of audio sales growth. These gains were driven by strong listener engagement across many of our stations, including at 98.5 Montréal, which remained stalwart in the spring 2024 Numeris ratings as Canada's most listened to radio station.
"Lastly, the new operating model and transformation we began during the quarter will allow us to sustain our growth, take our competitive agility to new heights, better serve our customers, and continue to build a strong culture where our colleagues thrive and succeed. We expect it to result in significant value creation for Cogeco over the coming years as the benefits of the transformation are realized."
Consolidated Financial Highlights
Three months ended May 31 |
2024 |
2023 |
Change |
Change in constant |
(1) |
||
(In thousands of Canadian dollars, except % and per share data) (unaudited) |
$ |
$ |
% |
% |
|||
Revenue |
777,249 |
767,603 |
1.3 |
1.0 |
|||
Adjusted EBITDA (1) |
369,786 |
355,459 |
4.0 |
3.8 |
|||
Profit for the period |
75,285 |
33,314 |
— |
||||
Profit (loss) for the period attributable to owners of the Corporation |
18,960 |
(34,473) |
— |
||||
Adjusted profit attributable to owners of the Corporation (1)(3) |
29,102 |
37,921 |
(23.3) |
||||
Cash flows from operating activities |
335,126 |
283,180 |
18.3 |
||||
Free cash flow (1) |
89,276 |
107,379 |
(16.9) |
(16.8) |
|||
Free cash flow, excluding network expansion projects (1) |
113,709 |
139,210 |
(18.3) |
(18.3) |
|||
Acquisition of property, plant and equipment |
172,404 |
190,121 |
(9.3) |
||||
Net capital expenditures (1)(2) |
169,754 |
170,258 |
(0.3) |
(0.7) |
|||
Net capital expenditures, excluding network expansion projects (1) |
145,321 |
138,427 |
5.0 |
4.6 |
|||
Diluted earnings (loss) per share |
1.97 |
(2.22) |
— |
||||
Adjusted diluted earnings per share (1)(3) |
3.02 |
2.43 |
24.3 |
||||
Operating results
For the third quarter of fiscal 2024 ended on May 31, 2024:
- Revenue increased by 1.3% to $777.2 million. On a constant currency basis(1), revenue increased by 1.0% driven by revenue growth in the Canadian telecommunications segment, while revenue remained stable in the American telecommunications segment, as explained below.
- Canadian telecommunications' revenue increased by 2.2%, mostly driven by the cumulative effect of high-speed Internet service additions over the past year as well as the Niagara Regional Broadband Network acquisition ("NRBN") completed on February 5, 2024.
- American telecommunications' revenue remained stable as reported and in constant currency, mainly resulting from a higher revenue per subscriber and a better product mix resulting from customers subscribing to increasingly fast Internet speeds, offset by lower video subscriptions and a lower Internet subscriber base over the past year, with an increasing proportion of customers only subscribing to Internet services.
- Revenue in the media activities increased by 3.3%.
- Adjusted EBITDA increased by 4.0% to $369.8 million. On a constant currency basis, adjusted EBITDA increased by 3.8%, mainly due to higher adjusted EBITDA in both the American and Canadian telecommunications segments, as explained below, and lower corporate costs primarily due to the timing of certain operating expenses.
- American telecommunications adjusted EBITDA increased by 4.5%, or 3.9% in constant currency, mostly due to lower operating expenses driven by cost reduction initiatives and operating efficiencies.
- Canadian telecommunications adjusted EBITDA increased by 2.9%, mainly due to revenue growth, partly offset by higher sales and other operating expenses to drive subscriber growth.
- Profit for the period amounted to $75.3 million, of which $19.0 million, or $1.97 per diluted share, was attributable to owners of the Corporation compared to a profit of $33.3 million, and a loss of $34.5 million, or $2.22 per diluted share, respectively, in the comparable period of fiscal 2023. The increases in profit for the period and profit attributable to owners of the Corporation resulted mainly from last year's non-cash impairment charges of $88 million related to the radio operations and higher adjusted EBITDA, partly offset by higher restructuring costs, depreciation and amortization expense and income tax expense.
- Adjusted profit attributable to owners of the Corporation(3) was $29.1 million, or $3.02 per diluted share(3), compared to $37.9 million, or $2.43 per diluted share, last year. The increase of adjusted diluted earnings per share over last year reflects the benefit of the Corporation's repurchase and cancellation of shares.
- Net capital expenditures were $169.8 million, a decrease of 0.3% compared to $170.3 million in the same period of the prior year. In constant currency, net capital expenditures(1) were $169.1 million, a decrease of 0.7% compared to last year, mainly due to lower spending in the American telecommunications segment as expected due to the timing of network expansion projects, partly offset by higher purchases of customer premise equipment and other capital spending related to fibre-to-the-home network expansions in the Canadian telecommunications segment.
- Excluding network expansion projects, net capital expenditures were $145.3 million, an increase of 5.0% compared to $138.4 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects(1) were $144.8 million, an increase of 4.6% compared to last year.
- Fibre-to-the-home network expansion projects continued in both Canada and the United States, with homes passed additions close to 44,000(4) during the first nine months of fiscal 2024.
- Acquisition of property, plant and equipment decreased by 9.3% to $172.4 million, mainly resulting from lower spending.
- Free cash flow decreased by 16.9%, or 16.8% in constant currency, and amounted to $89.3 million as reported and in constant currency, mainly due to higher restructuring costs. Free cash flow, excluding network expansion projects decreased by 18.3% as reported and in constant currency, and amounted to $113.7 million.
- Cash flows from operating activities increased by 18.3% to $335.1 million, mostly due to the timing of payments of trade and other payables and the collection of trade accounts receivable, lower income taxes paid and higher adjusted EBITDA.
- Cogeco maintains its fiscal 2024 financial guidelines as issued on November 1, 2023.
- At its July 11, 2024 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 in the comparable quarter of fiscal 2023.
___________________________________________________________________________________________________________________________
(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 exclude non-cash acquisitions of right-of-use assets and the purchases, and related borrowing costs, of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance. |
(3) |
Excludes the impact of non-cash impairment charges and acquisition, integration, restructuring and other costs, net of tax and non-controlling interest. |
(4) |
Organic growth calculated by excluding additions resulting from acquisitions. |
Financial highlights
Three and nine months ended May 31 |
2024 |
2023 |
Change |
Change in constant |
(1) (2) |
2024 |
2023 |
Change |
Change in constant |
(1) (2) |
(In thousands of Canadian dollars, |
$ |
$ |
% |
% |
$ |
$ |
% |
% |
||
Operations |
||||||||||
Revenue |
777,249 |
767,603 |
1.3 |
1.0 |
2,305,329 |
2,314,484 |
(0.4) |
(0.6) |
||
Adjusted EBITDA (2) |
369,786 |
355,459 |
4.0 |
3.8 |
1,083,601 |
1,081,004 |
0.2 |
— |
||
Acquisition, integration, restructuring |
46,634 |
11,377 |
— |
51,121 |
21,006 |
— |
||||
Impairment of goodwill and |
— |
88,000 |
— |
— |
88,000 |
— |
||||
Profit for the period |
75,285 |
33,314 |
— |
267,944 |
259,714 |
3.2 |
||||
Profit (loss) for the period |
18,960 |
(34,473) |
— |
77,498 |
41,396 |
87.2 |
||||
Adjusted profit attributable to |
29,102 |
37,921 |
(23.3) |
93,486 |
116,292 |
(19.6) |
||||
Cash flow |
||||||||||
Cash flows from operating activities |
335,126 |
283,180 |
18.3 |
858,427 |
683,844 |
25.5 |
||||
Free cash flow (2) |
89,276 |
107,379 |
(16.9) |
(16.8) |
329,923 |
335,193 |
(1.6) |
(1.7) |
||
Free cash flow, excluding network |
113,709 |
139,210 |
(18.3) |
(18.3) |
410,406 |
475,100 |
(13.6) |
(13.8) |
||
Acquisition of property, plant and |
172,404 |
190,121 |
(9.3) |
507,427 |
598,803 |
(15.3) |
||||
Net capital expenditures (2)(5) |
169,754 |
170,258 |
(0.3) |
(0.7) |
488,177 |
524,432 |
(6.9) |
(7.1) |
||
Net capital expenditures, excluding |
145,321 |
138,427 |
5.0 |
4.6 |
407,694 |
384,525 |
6.0 |
5.8 |
||
Per share data (6) |
||||||||||
Earnings (loss) per share |
||||||||||
Basic |
1.99 |
(2.22) |
— |
6.58 |
2.65 |
— |
||||
Diluted |
1.97 |
(2.22) |
— |
6.52 |
2.64 |
— |
||||
Adjusted diluted (2)(4) |
3.02 |
2.43 |
24.3 |
7.87 |
7.41 |
6.2 |
||||
Dividends per share |
0.854 |
0.731 |
16.8 |
2.562 |
2.193 |
16.8 |
||||
(1) |
Key performance indicators presented on a constant currency basis are obtained by translating financial results from the current period denominated in US dollars at the foreign exchange rate of the comparable period of the prior year. For the three and nine-month periods ended May 31, 2023, the average foreign exchange rates used for translation were 1.3562 USD/CDN and 1.3513 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 and nine-month periods ended May 31, 2024, acquisition, integration, restructuring and other costs were mostly related to restructuring costs recognized during the third quarter of fiscal 2024. For the three and nine-month periods ended May 31, 2023, acquisition, integration, restructuring and other costs resulted mostly from costs related to the integration of past acquisitions and from a $3.3 million retroactive adjustment recognized during the third quarter, in addition to a $5.1 million adjustment recognized during the second quarter following the Copyright Board preliminary conclusions on the redetermination of the 2014-2018 royalty rates, of which $4.2 million was reversed during the second quarter of fiscal 2024 following the Copyright Board decision issued in January 2024. |
(4) |
Excludes the impact of non-cash impairment charges, acquisition, integration, restructuring and other costs, and gains/losses on debt modification and/or extinguishment, net of tax and non-controlling interest. |
(5) |
Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases, and related borrowing costs, of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance. |
(6) |
Per multiple and subordinate voting share. |
As at |
May 31, 2024 |
August 31, 2023 |
(In thousands of Canadian dollars) |
$ |
$ |
Financial condition |
||
Cash and cash equivalents |
55,135 |
363,854 |
Total assets |
9,878,343 |
9,869,778 |
Long-term debt |
||
Current |
79,403 |
43,325 |
Non-current |
5,026,116 |
5,045,672 |
Net indebtedness (1) |
5,127,971 |
4,817,113 |
Equity attributable to owners of the Corporation |
811,526 |
925,863 |
(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 three and nine-month periods ended May 31, 2024, available on SEDAR+ at www.sedarplus.ca. |
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 relating to 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" section of the Corporation's 2023 annual MD&A and of the fiscal 2024 third-quarter MD&A, and the "Fiscal 2024 financial guidelines" section of the Corporation's 2023 annual 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 general market conditions, 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 and of the fiscal 2024 third-quarter 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 and the forward-looking statements contained in this press release 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 Corporation's MD&A for the three and nine-month periods ended May 31, 2024, the Corporation's condensed interim consolidated financial statements and the notes thereto for the same periods prepared in accordance with International Financial Reporting Standards ("IFRS") and the Corporation's 2023 Annual Report.
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 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 three and nine-month periods ended May 31, 2024, 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 measures |
Used in the component of the following non-IFRS ratios |
Adjusted profit attributable to owners of the Corporation |
Adjusted diluted earnings per share |
Constant currency basis |
Change in constant currency |
Financial measures presented on a constant currency basis for the three and nine-month periods ended May 31, 2024 are translated at the average foreign exchange rate of the comparable periods of the prior year, which were 1.3562 USD/CDN and 1.3513 USD/CDN, respectively.
Constant currency basis and foreign exchange impact reconciliation
Consolidated
Three months ended May 31 |
2024 |
2023 |
Change |
|||||||
(In thousands of Canadian dollars, except |
Actual |
Foreign |
In constant |
Actual |
Actual |
In constant |
||||
$ |
$ |
$ |
$ |
% |
% |
|||||
Revenue |
777,249 |
(1,802) |
775,447 |
767,603 |
1.3 |
1.0 |
||||
Operating expenses |
407,463 |
(934) |
406,529 |
412,144 |
(1.1) |
(1.4) |
||||
Adjusted EBITDA |
369,786 |
(868) |
368,918 |
355,459 |
4.0 |
3.8 |
||||
Free cash flow |
89,276 |
50 |
89,326 |
107,379 |
(16.9) |
(16.8) |
||||
Net capital expenditures |
169,754 |
(622) |
169,132 |
170,258 |
(0.3) |
(0.7) |
||||
Nine months ended May 31 |
2024 |
2023 |
Change |
|||||||
(In thousands of Canadian dollars, except |
Actual |
Foreign |
In constant |
Actual |
Actual |
In constant |
||||
$ |
$ |
$ |
$ |
% |
% |
|||||
Revenue |
2,305,329 |
(5,293) |
2,300,036 |
2,314,484 |
(0.4) |
(0.6) |
||||
Operating expenses |
1,221,728 |
(2,887) |
1,218,841 |
1,233,480 |
(1.0) |
(1.2) |
||||
Adjusted EBITDA |
1,083,601 |
(2,406) |
1,081,195 |
1,081,004 |
0.2 |
— |
||||
Free cash flow |
329,923 |
(470) |
329,453 |
335,193 |
(1.6) |
(1.7) |
||||
Net capital expenditures |
488,177 |
(1,086) |
487,091 |
524,432 |
(6.9) |
(7.1) |
||||
Canadian telecommunications segment
Three months ended May 31 |
2024 |
2023 |
Change |
|||||||
(In thousands of Canadian dollars, except |
Actual |
Foreign |
In constant |
Actual |
Actual |
In constant |
||||
$ |
$ |
$ |
$ |
% |
% |
|||||
Revenue |
381,877 |
— |
381,877 |
373,743 |
2.2 |
2.2 |
||||
Operating expenses |
180,204 |
(31) |
180,173 |
177,794 |
1.4 |
1.3 |
||||
Adjusted EBITDA |
201,673 |
31 |
201,704 |
195,949 |
2.9 |
2.9 |
||||
Net capital expenditures |
91,093 |
(258) |
90,835 |
84,415 |
7.9 |
7.6 |
||||
Nine months ended May 31 |
2024 |
2023 |
Change |
|||||||
(In thousands of Canadian dollars, except |
Actual |
Foreign |
In constant |
Actual |
Actual |
In constant |
||||
$ |
$ |
$ |
$ |
% |
% |
|||||
Revenue |
1,131,804 |
— |
1,131,804 |
1,114,161 |
1.6 |
1.6 |
||||
Operating expenses |
535,018 |
(159) |
534,859 |
521,534 |
2.6 |
2.6 |
||||
Adjusted EBITDA |
596,786 |
159 |
596,945 |
592,627 |
0.7 |
0.7 |
||||
Net capital expenditures |
285,274 |
(218) |
285,056 |
281,036 |
1.5 |
1.4 |
||||
American telecommunications segment
Three months ended May 31 |
2024 |
2023 |
Change |
|||||||
(In thousands of Canadian dollars, except |
Actual |
Foreign |
In constant |
Actual |
Actual |
In constant |
||||
$ |
$ |
$ |
$ |
% |
% |
|||||
Revenue |
368,706 |
(1,802) |
366,904 |
368,042 |
0.2 |
(0.3) |
||||
Operating expenses |
190,327 |
(887) |
189,440 |
197,273 |
(3.5) |
(4.0) |
||||
Adjusted EBITDA |
178,379 |
(915) |
177,464 |
170,769 |
4.5 |
3.9 |
||||
Net capital expenditures |
72,782 |
(349) |
72,433 |
82,923 |
(12.2) |
(12.7) |
||||
Nine months ended May 31 |
2024 |
2023 |
Change |
|||||||
(In thousands of Canadian dollars, except |
Actual |
Foreign |
In constant |
Actual |
Actual |
In constant |
||||
$ |
$ |
$ |
$ |
% |
% |
|||||
Revenue |
1,096,969 |
(5,293) |
1,091,676 |
1,126,570 |
(2.6) |
(3.1) |
||||
Operating expenses |
574,070 |
(2,716) |
571,354 |
607,237 |
(5.5) |
(5.9) |
||||
Adjusted EBITDA |
522,899 |
(2,577) |
520,322 |
519,333 |
0.7 |
0.2 |
||||
Net capital expenditures |
191,490 |
(854) |
190,636 |
236,422 |
(19.0) |
(19.4) |
||||
Adjusted profit attributable to owners of the Corporation
Three months ended May 31 |
Nine months ended May 31 |
|||
2024 |
2023 |
2024 |
2023 |
|
(In thousands of Canadian dollars) |
$ |
$ |
$ |
$ |
Profit (loss) for the period attributable to owners of the Corporation |
18,960 |
(34,473) |
77,498 |
41,396 |
Impairment of goodwill and intangible assets |
— |
88,000 |
— |
88,000 |
Acquisition, integration, restructuring and other costs |
46,634 |
11,377 |
51,121 |
21,006 |
Loss on debt extinguishment (1) |
— |
— |
16,880 |
— |
Tax impact for the above items |
(12,337) |
(21,386) |
(17,978) |
(23,938) |
Non-controlling interest impact for the above items |
(24,155) |
(5,597) |
(34,035) |
(10,172) |
Adjusted profit attributable to owners of the Corporation |
29,102 |
37,921 |
93,486 |
116,292 |
(1) Included within financial expense. |
Free cash flow reconciliation
Three months ended May 31 |
Nine months ended May 31 |
|||
2024 |
2023 |
2024 |
2023 |
|
(In thousands of Canadian dollars) |
$ |
$ |
$ |
$ |
Cash flows from operating activities |
335,126 |
283,180 |
858,427 |
683,844 |
Changes in other non-cash operating activities |
(73,787) |
(20,729) |
(14,195) |
115,392 |
Income taxes paid (received) |
3,502 |
19,166 |
(1,234) |
89,778 |
Current income taxes |
(3,390) |
(5,828) |
(20,313) |
(26,450) |
Interest paid |
65,253 |
64,507 |
201,133 |
176,777 |
Financial expense |
(67,109) |
(64,300) |
(222,211) |
(183,812) |
Loss on debt extinguishment (1) |
— |
— |
16,880 |
— |
Amortization of deferred transaction costs and discounts on long-term debt (1) |
2,329 |
3,353 |
7,079 |
9,460 |
Net capital expenditures (2) |
(169,754) |
(170,258) |
(488,177) |
(524,432) |
Repayment of lease liabilities |
(2,894) |
(1,712) |
(7,466) |
(5,364) |
Free cash flow |
89,276 |
107,379 |
329,923 |
335,193 |
(1) |
Included within financial expense. |
(2) |
Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases, and related borrowing costs, of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance. |
Net capital expenditures reconciliation
Three months ended May 31 |
Nine months ended May 31 |
|||
2024 |
2023 |
2024 |
2023 |
|
(In thousands of Canadian dollars) |
$ |
$ |
$ |
$ |
Acquisition of property, plant and equipment |
172,404 |
190,121 |
507,427 |
598,803 |
Subsidies received in advance recognized as a reduction of the cost of |
(2,650) |
(19,863) |
(19,250) |
(74,371) |
Net capital expenditures |
169,754 |
170,258 |
488,177 |
524,432 |
Adjusted EBITDA reconciliation
Three months ended May 31 |
Nine months ended May 31 |
|||
2024 |
2023 |
2024 |
2023 |
|
(In thousands of Canadian dollars) |
$ |
$ |
$ |
$ |
Profit for the period |
75,285 |
33,314 |
267,944 |
259,714 |
Income taxes |
11,172 |
2,271 |
47,546 |
60,552 |
Financial expense |
67,109 |
64,300 |
222,211 |
183,812 |
Impairment of goodwill and intangible assets |
— |
88,000 |
— |
88,000 |
Depreciation and amortization |
169,586 |
156,197 |
494,779 |
467,920 |
Acquisition, integration, restructuring and other costs |
46,634 |
11,377 |
51,121 |
21,006 |
Adjusted EBITDA |
369,786 |
355,459 |
1,083,601 |
1,081,004 |
Net capital expenditures and free cash flow excluding network expansion projects reconciliations
Net capital expenditures
Three months ended May 31 |
2024 |
2023 |
Change |
|||||||
(In thousands of Canadian dollars, except |
Actual |
Foreign |
In constant |
Actual |
Actual |
In constant |
||||
$ |
$ |
$ |
$ |
% |
% |
|||||
Net capital expenditures |
169,754 |
(622) |
169,132 |
170,258 |
(0.3) |
(0.7) |
||||
Net capital expenditures in connection with |
24,433 |
(53) |
24,380 |
31,831 |
(23.2) |
(23.4) |
||||
Net capital expenditures, excluding network |
145,321 |
(569) |
144,752 |
138,427 |
5.0 |
4.6 |
||||
Nine months ended May 31 |
2024 |
2023 |
Change |
|||||||
(In thousands of Canadian dollars, except |
Actual |
Foreign |
In constant |
Actual |
Actual |
In constant |
||||
$ |
$ |
$ |
$ |
% |
% |
|||||
Net capital expenditures |
488,177 |
(1,086) |
487,091 |
524,432 |
(6.9) |
(7.1) |
||||
Net capital expenditures in connection with |
80,483 |
(204) |
80,279 |
139,907 |
(42.5) |
(42.6) |
||||
Net capital expenditures, excluding network |
407,694 |
(882) |
406,812 |
384,525 |
6.0 |
5.8 |
||||
Free cash flow
Three months ended May 31 |
2024 |
2023 |
Change |
|||||||
(In thousands of Canadian dollars, except |
Actual |
Foreign |
In constant |
Actual |
Actual |
In constant |
||||
$ |
$ |
$ |
$ |
% |
% |
|||||
Free cash flow |
89,276 |
50 |
89,326 |
107,379 |
(16.9) |
(16.8) |
||||
Net capital expenditures in connection with |
24,433 |
(53) |
24,380 |
31,831 |
(23.2) |
(23.4) |
||||
Free cash flow, excluding network expansion |
113,709 |
(3) |
113,706 |
139,210 |
(18.3) |
(18.3) |
||||
Nine months ended May 31 |
2024 |
2023 |
Change |
|||||||
(In thousands of Canadian dollars, except |
Actual |
Foreign |
In constant |
Actual |
Actual |
In constant |
||||
$ |
$ |
$ |
$ |
% |
% |
|||||
Free cash flow |
329,923 |
(470) |
329,453 |
335,193 |
(1.6) |
(1.7) |
||||
Net capital expenditures in connection with |
80,483 |
(204) |
80,279 |
139,907 |
(42.5) |
(42.6) |
||||
Free cash flow, excluding network expansion |
410,406 |
(674) |
409,732 |
475,100 |
(13.6) |
(13.8) |
||||
Additional information
Additional information relating to the Corporation 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 subscribers. Its Cogeco Communications Inc. subsidiary provides Internet, video and wireline phone services in Canada, and in thirteen states in the United States under the Cogeco Connexion, oxio and Breezeline brand names. Breezeline also offers wireless services in most of the U.S. states in which it operates. 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
Troy Crandall
Head, Investor Relations
Cogeco Inc.
Tel.: 514 764-4600
[email protected]
Media
Youann Blouin
Director, Media Relations & Strategic Communications
Cogeco Inc.
Tel.: 514 297-2853
[email protected]
Conference Call: |
Friday, July 12th, 2024 at 11:00 a.m. (Eastern Daylight Time) |
|
A live audio of the analyst conference call will be available on both the Investor Relations and the Events and Presentations pages on Cogeco's website. Financial analysts will be able to access the live conference call and ask questions. Media representatives may attend as listeners only. A recording of the conference call 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: 1 289 514-5100 |
||
Toll Free - North America: 1 800 717-1738 |
||
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.
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