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Cogeco Releases its Financial Results for the Fourth Quarter of Fiscal 2023

  • 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.

Cision
Cision

View original content: http://www.newswire.ca/en/releases/archive/November2023/01/c9942.html

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