- Strong progress on the strategic priorities announced last
quarter centered on synergies, digitization, advanced analytics,
network expansion and wireless.
- Successfully completed the combination of our Canadian and
U.S. telecommunications teams.
- Signed strategic partnerships to enable an upcoming launch
of wireless services in Canada, in
a capital-efficient manner as an MVNO.
- Met or exceeded all financial guidelines set for fiscal
2024; issuing fiscal 2025 financial guidelines.
- Increasing quarterly eligible dividend by 8.0% to
$0.922 per share.
MONTRÉAL, Oct. 31,
2024 /CNW/ - Today, Cogeco Communications Inc.
(TSX: CCA) ("Cogeco Communications" or the "Corporation") announced
its financial results for the fourth quarter ended August 31,
2024 and is issuing its fiscal 2025 financial guidelines.
"Fiscal 2024 has been a year of tremendous progress for
Cogeco," said Frédéric Perron, President and CEO. "Over the
last six months alone, we set clear priorities to achieve
sustainable growth, launched wireless in the U.S., assembled the
building blocks to launch wireless in Canada as an MVNO, successfully combined our
Canadian and U.S. organizations and refreshed our executive team.
The recently completed restructuring, which simplified our
operating model, was the first phase of a structured three-year
program. We are now in a position to accelerate our digital
capabilities, drive bundling across wireline and wireless, and
continue to optimize our operations for ongoing growth and value
creation.
"Our Canadian telecommunications business continued to perform
well in Q4, driven by growth of our Internet subscriber base
through Cogeco Connexion, oxio, and our network expansion program.
We're particularly excited about our oxio brand's performance as
its digital model has not only become a growth engine for the
organization, but has also become a model for key transformation
initiatives within the Corporation more broadly.
"In the U.S., the launch of Breezeline Mobile provides customers
even more compelling reasons to bundle their services with us. Our
Internet-led strategy and focus on operational efficiency
contributed to another quarter of strong margin growth.
"Over the past year, we have maintained our balanced approach to
allocating capital to growth initiatives including network
expansion, product improvements, and a capital-light approach to
growing wireless services in both countries, as well as returning
capital through an increased dividend and share buybacks, all while
progressively reducing our leverage. We will continue with our
balanced approach in fiscal 2025 and with that, we are delighted to
announce an increase in our quarterly dividend per share
to $0.922."
Consolidated Financial Highlights
|
Three months ended
August 31
|
2024
|
|
2023
|
(1)
|
Change
|
Change in
constant
currency
|
(2)
|
|
(In thousands of
Canadian dollars, except % and per share data)
(unaudited)
|
$
|
|
$
|
|
%
|
%
|
|
|
Revenue
|
747,751
|
|
743,397
|
|
0.6
|
(0.7)
|
|
|
Adjusted EBITDA
(2)
|
370,418
|
|
351,300
|
|
5.4
|
4.2
|
|
|
Adjusted EBITDA margin
(2)
|
49.5 %
|
|
47.3 %
|
|
|
|
|
|
Profit for the
period
|
85,484
|
|
91,797
|
|
(6.9)
|
|
|
|
Profit for the period
attributable to owners of the Corporation
|
81,958
|
|
86,499
|
|
(5.2)
|
|
|
|
Adjusted profit
attributable to owners of the Corporation
(2)(3)
|
99,054
|
|
97,175
|
|
1.9
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
319,177
|
|
281,326
|
|
13.5
|
|
|
|
Free cash flow
(1)(2)
|
148,189
|
|
88,953
|
|
66.6
|
66.1
|
|
|
Free cash flow,
excluding network expansion projects (1)(2)
|
205,100
|
|
121,881
|
|
68.3
|
67.4
|
|
|
|
|
|
|
|
|
|
|
Acquisition of
property, plant and equipment
|
154,260
|
|
205,570
|
|
(25.0)
|
|
|
|
Net capital
expenditures (2)(4)
|
152,253
|
|
176,617
|
|
(13.8)
|
(15.1)
|
|
|
Net capital
expenditures, excluding network expansion projects
(2)
|
95,342
|
|
143,689
|
|
(33.6)
|
(34.8)
|
|
|
|
|
|
|
|
|
|
|
Capital intensity
(2)
|
20.4 %
|
|
23.8 %
|
|
|
|
|
|
Capital intensity,
excluding network expansion projects (2)
|
12.8 %
|
|
19.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
1.94
|
|
1.95
|
|
(0.5)
|
|
|
|
Adjusted diluted
earnings per share (2)(3)
|
2.35
|
|
2.19
|
|
7.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating results
For the fourth quarter of fiscal 2024 ended on August 31,
2024:
- Revenue increased by 0.6% to $747.8
million. On a constant currency basis(2), revenue
decreased by 0.7% due to a decline in revenue in the American
telecommunications segment, offset in part by revenue growth in the
Canadian telecommunications segment, as explained below.
- American telecommunications' revenue decreased by 2.3% in
constant currency (remained stable as reported), mainly due to a
decline in its subscriber base, especially for entry-level
services, and a higher proportion of customers subscribing to
Internet-only services. The decline was offset in part by higher
revenue per subscriber and a better product mix resulting from
improving subscriber metrics.
- Canadian telecommunications' revenue increased by 0.8%, mostly
driven by the cumulative effect of high-speed Internet service
additions over the past year, including from network expansion
projects, as well as the Niagara Regional Broadband Network
acquisition completed on February 5,
2024.
- Adjusted EBITDA increased by 5.4% to $370.4 million. On a constant currency basis,
adjusted EBITDA increased by 4.2%, mainly due to higher adjusted
EBITDA in both the Canadian and American telecommunications
segments, driven by cost reduction initiatives and operating
efficiencies across the Corporation as a result of our ongoing
transformation program, in addition to revenue growth in the
Canadian telecommunications segment.
- Canadian telecommunications adjusted EBITDA increased by 3.8%,
or 4.0% in constant currency.
- American telecommunications adjusted EBITDA increased by 5.2%,
or 2.4% in constant currency.
- Profit for the period amounted to $85.5
million, of which $82.0
million, or $1.94 per diluted
share, was attributable to owners of the Corporation compared to
$91.8 million, $86.5 million, and $1.95 per diluted share, respectively, in the
comparable period of fiscal 2023. The decreases in profit for the
period and profit attributable to owners of the Corporation
resulted mainly from higher depreciation and amortization expense
and non-cash pre-tax impairment charges of $14.9 million recognized during the quarter
mostly in relation to strategic partnerships to facilitate the
development of wireless services in Canada under a capital-light operating model,
partly offset by higher adjusted EBITDA, lower financial expense
and lower acquisition, integration, restructuring and other costs.
- Adjusted profit attributable to owners of the
Corporation(3) was $99.1
million, or $2.35 per diluted
share(3), compared to $97.2
million, or $2.19 per diluted
share, last year. The increase of adjusted diluted earnings per
share over last year reflects the benefit of the Corporation's
share buybacks.
- Net capital expenditures were $152.3
million, a decrease of 13.8% compared to $176.6 million in the same period of the prior
year. In constant currency, net capital expenditures(2)
were $150.0 million, a decrease of
15.1% compared to last year, mainly resulting from lower spending
due to the timing of network expansion projects in both the
American and Canadian telecommunications segments, in addition to
drawdowns of previously accumulated customer premise equipment
inventory in the American telecommunications segment.
- Excluding network expansion projects, net capital expenditures
were $95.3 million, a decrease of
33.6% compared to $143.7 million in
the same period of the prior year. In constant currency, net
capital expenditures, excluding network expansion
projects(2) were $93.7
million, a decrease of 34.8% compared to last year.
- Fibre-to-the-home network expansion projects continued in both
Canada and the United States by adding close to
58,000(5) homes passed during fiscal 2024, of which
close to 14,000(5) were in the fourth quarter.
- Capital intensity was 20.4% compared to 23.8% last year.
Excluding network expansion projects, capital intensity was 12.8%
compared to 19.3% in the same period of the prior year.
- Acquisition of property, plant and equipment decreased by 25.0%
to $154.3 million, mainly resulting
from lower spending.
- Free cash flow(1) increased by 66.6%, or 66.1% in
constant currency, and amounted to $148.2
million, or $147.7 million in
constant currency, mainly due to lower net capital expenditures,
higher adjusted EBITDA and lower financial expense. Free cash flow,
excluding network expansion projects(1) increased by
68.3%, or 67.4% in constant currency, and amounted to $205.1 million, or $204.1
million in constant currency.
- Cash flows from operating activities increased by 13.5% to
$319.2 million, mainly from the
timing of payments of trade and other payables and higher adjusted
EBITDA.
- At its October 31, 2024 meeting,
the Board of Directors of Cogeco Communications declared a
quarterly eligible dividend of $0.922
per share, an increase of 8.0% compared to $0.854 per share last year.
FISCAL 2025 FINANCIAL GUIDELINES
Cogeco Communications released its fiscal 2025 financial
guidelines. Fiscal 2025 will be the first year of a three-year
transformation program, where investments are made in order to set
the Corporation on a path to sustainable growth. On a constant
currency basis, the Corporation expects fiscal 2025 revenue to
remain stable resulting from a combination of Internet subscriber
growth and a decline in video and wireline phone subscriptions. On
a constant currency basis, fiscal 2025 adjusted EBITDA is
anticipated to remain stable, mainly due to stable revenue as well
as stable operating expenses, which are anticipated to benefit from
the recent corporate reorganization and other operational
improvements, offset by investments into new capabilities as part
of a three-year transformation program. Net capital expenditures
are anticipated to be between $650
and $725 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. Capital intensity is
expected to range between 22% and 24%, or 17% and 19% excluding
network expansion projects. Free cash flow and free cash flow,
excluding network expansion projects, are expected to decrease
between 0% and 10% due to stronger than anticipated free cash flow
in fiscal 2024, continued growth-oriented investments, and higher
financial expense and current income tax.
|
|
|
|
|
October 31,
2024
|
|
|
|
Projections
|
(i)
|
Actual
|
|
Fiscal
2025
(constant
currency)
|
(ii)
|
Fiscal 2024
|
|
(In millions of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
|
|
|
|
Financial
guidelines
|
|
|
|
|
Revenue
|
Stable
|
|
2,977
|
|
Adjusted
EBITDA
|
Stable
|
|
1,442
|
|
Net capital
expenditures
|
$650 to
$725
|
|
638
|
|
Net capital
expenditures in connection with network expansion
projects
|
$140 to
$190
|
|
137
|
|
Capital
intensity
|
22% to
24%
|
|
21.4 %
|
|
Capital intensity,
excluding network expansion projects
|
17% to
19%
|
|
16.8 %
|
|
Free cash
flow
|
Decrease of 0% to
10%
|
(iii)
|
476
|
|
Free cash flow,
excluding network expansion projects
|
Decrease of 0% to
10%
|
(iii)
|
613
|
|
|
|
|
|
(i)
|
Percentage of changes
compared to fiscal 2024.
|
|
(ii)
|
Fiscal 2025 financial
guidelines are based on a USD/CDN constant exchange rate of 1.3606
USD/CDN.
|
|
(iii)
|
The assumed current
income tax effective rate is approximately 14%.
|
These financial guidelines, including the various assumptions
underlying them, contain forward-looking statements concerning the
business outlook for Cogeco Communications, and should be read in
conjunction with the "Forward-looking statements" section of this
press release.
|
(1)
|
During the fourth
quarter of fiscal 2024, the Corporation updated its calculation of
free cash flow and free cash flow, excluding network expansion
projects, to include proceeds on disposals of property, plant and
equipment. Comparative figures were restated to conform to the
current presentation. For further details, please refer to the
"Non-IFRS Accounting Standards and other financial measures"
section of this press release.
|
|
(2)
|
Adjusted EBITDA and net
capital expenditures are total of segments measures. Adjusted
EBITDA margin and capital intensity are supplementary financial
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 Accounting
Standards measures. Change in constant currency, capital intensity,
excluding network expansion projects and adjusted diluted earnings
per share are non-IFRS Accounting Standards ratios. These indicated
terms do not have standardized definitions prescribed by
IFRS® Accounting Standards, as issued by the
International Accounting Standards Board ("IFRS Accounting
Standards") 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 Accounting
Standards and other financial measures" section of this press
release.
|
|
(3)
|
Excludes the impact of
non-cash impairment charges, and acquisition, integration,
restructuring and other costs, net of tax and non-controlling
interest.
|
|
(4)
|
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.
|
|
(5)
|
Organic growth
calculated by excluding additions resulting from
acquisitions.
|
Financial highlights
|
|
|
|
|
Change in
constant
currency
|
|
|
|
|
|
Change in
constant
currency
|
|
|
Three months and
years ended August 31
|
2024
|
2023
|
(1)
|
Change
|
(2)
(3)
|
2024
|
2023
|
(1)
|
Change
|
(2)
(3)
|
|
(In thousands of
Canadian dollars, except % and per share data)
|
$
|
$
|
|
%
|
%
|
|
$
|
$
|
|
%
|
%
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
747,751
|
743,397
|
|
0.6
|
(0.7)
|
|
2,976,524
|
2,984,128
|
|
(0.3)
|
(0.8)
|
|
|
Adjusted EBITDA
(3)
|
370,418
|
351,300
|
|
5.4
|
4.2
|
|
1,442,314
|
1,421,066
|
|
1.5
|
1.0
|
|
|
Adjusted EBITDA margin
(3)
|
49.5 %
|
47.3 %
|
|
|
|
|
48.5 %
|
47.6 %
|
|
|
|
|
|
Acquisition,
integration, restructuring and other costs
(4)
|
10,561
|
15,228
|
|
(30.6)
|
|
|
59,731
|
36,225
|
|
64.9
|
|
|
|
Impairment of property,
plant and equipment
|
14,862
|
—
|
|
—
|
|
|
14,862
|
—
|
|
—
|
|
|
|
Profit for the
period
|
85,484
|
91,797
|
|
(6.9)
|
|
|
354,132
|
417,972
|
|
(15.3)
|
|
|
|
Profit for the period
attributable to owners of the Corporation
|
81,958
|
86,499
|
|
(5.2)
|
|
|
335,534
|
392,273
|
|
(14.5)
|
|
|
|
Adjusted profit
attributable to owners of the Corporation
(3)(5)
|
99,054
|
97,175
|
|
1.9
|
|
|
400,431
|
417,960
|
|
(4.2)
|
|
|
|
Cash
flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
319,177
|
281,326
|
|
13.5
|
|
|
1,175,219
|
962,905
|
|
22.0
|
|
|
|
Free cash flow
(1)(3)
|
148,189
|
88,953
|
|
66.6
|
66.1
|
|
476,021
|
418,056
|
|
13.9
|
13.6
|
|
|
Free cash flow,
excluding network expansion projects (1)(3)
|
205,100
|
121,881
|
|
68.3
|
67.4
|
|
613,415
|
590,891
|
|
3.8
|
3.5
|
|
|
Acquisition of
property, plant and equipment
|
154,260
|
205,570
|
|
(25.0)
|
|
|
659,090
|
802,830
|
|
(17.9)
|
|
|
|
Net capital
expenditures (3)(6)
|
152,253
|
176,617
|
|
(13.8)
|
(15.1)
|
|
637,833
|
699,506
|
|
(8.8)
|
(9.3)
|
|
|
Net capital
expenditures, excluding network expansion projects
(3)
|
95,342
|
143,689
|
|
(33.6)
|
(34.8)
|
|
500,439
|
526,671
|
|
(5.0)
|
(5.5)
|
|
|
Capital intensity
(3)
|
20.4 %
|
23.8 %
|
|
|
|
|
21.4 %
|
23.4 %
|
|
|
|
|
|
Capital intensity,
excluding network expansion projects (3)
|
12.8 %
|
19.3 %
|
|
|
|
|
16.8 %
|
17.6 %
|
|
|
|
|
|
Per share data
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
1.95
|
1.95
|
|
—
|
|
|
7.87
|
8.78
|
|
(10.4)
|
|
|
|
Diluted
|
1.94
|
1.95
|
|
(0.5)
|
|
|
7.83
|
8.75
|
|
(10.5)
|
|
|
|
Adjusted diluted
(3)(5)
|
2.35
|
2.19
|
|
7.3
|
|
|
9.35
|
9.32
|
|
0.3
|
|
|
|
Dividends per
share
|
0.854
|
0.776
|
|
10.1
|
|
|
3.416
|
3.104
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
During the fourth
quarter of fiscal 2024, the Corporation updated its calculation of
free cash flow and free cash flow, excluding network expansion
projects, to include proceeds on disposals of property, plant and
equipment. Proceeds on disposals of property, plant and equipment
amounted to $0.6 million and $3.4 million for the three-month
period and year ended August 31, 2024, respectively ($1.0 million
and $2.7 million, respectively, in fiscal 2023). Comparative
figures were restated to conform to the current presentation. For
further details, please refer to the "Non-IFRS Accounting Standards
and other financial measures" section of this press
release.
|
|
(2)
|
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, 2023, the average foreign exchange rates used for
translation were 1.3329 USD/CDN and 1.3467 USD/CDN,
respectively.
|
|
(3)
|
Adjusted EBITDA and net
capital expenditures are total of segments measures. Adjusted
EBITDA margin and capital intensity are supplementary financial
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 Accounting Standards measures.
Change in constant currency, capital intensity, excluding network
expansion projects and adjusted diluted earnings per share are
non-IFRS Accounting Standards ratios. These indicated terms do not
have standardized definitions prescribed by IFRS Accounting
Standards 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 Accounting
Standards and other financial measures" section of this press
release.
|
|
(4)
|
For the three-month
period and year ended August 31, 2024, acquisition, integration,
restructuring and other costs were mostly related to restructuring
costs recognized during the second half of the year, including
costs related to the new organizational structure announced in May
2024 and other cost optimization initiatives. For the three-month
period and year ended August 31, 2023, acquisition, integration,
restructuring and other costs resulted mostly from costs related to
the 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 $8.4 million was recognized in fiscal 2023 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.
|
|
(5)
|
Excludes the impact of
non-cash impairment charges, acquisition, integration,
restructuring and other costs, and gains/losses on debt
modification and/or extinguishment, all net of tax and
non-controlling interest.
|
|
(6)
|
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.
|
|
(7)
|
Per multiple and
subordinate voting share.
|
|
|
|
|
As at
|
August 31,
2024
|
August 31,
2023
|
|
(In thousands of
Canadian dollars, except %)
|
$
|
$
|
|
Financial
condition
|
|
|
|
Cash and cash
equivalents
|
76,335
|
362,921
|
|
Total assets
|
9,675,009
|
9,768,370
|
|
Long-term
debt
|
|
|
|
Current
|
361,808
|
41,765
|
|
Non-current
|
4,448,261
|
4,979,241
|
|
Net indebtedness
(1)
|
4,803,629
|
4,749,214
|
|
Equity attributable to
owners of the Corporation
|
2,979,691
|
2,957,797
|
|
Return on equity
(2)
|
11.3 %
|
13.7 %
|
|
|
|
|
(1)
|
Net indebtedness is a
capital management measure. For more information on this financial
measure, please consult the "Non-IFRS Accounting Standards and
other financial measures" section of the Corporation's MD&A for
the year ended August 31, 2024, 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
Communications Inc.'s ("Cogeco Communications" 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 Communications believes
are reasonable as of the current date. Refer in particular to the
"Corporate objectives and strategy" and "Fiscal 2025 financial
guidelines" sections of the Corporation's Fiscal 2024 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 Communications
currently expects. These factors include risks such as general
market conditions, competitive risks (including changing
competitive and technology ecosystems and disruptive competitive
strategies adopted by our competitors), business risks, regulatory
risks, tax 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 the highly competitive market for a
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, sustainability and
sustainability reporting risks, ethical behavior risks, ownership
risks, litigation risks and public health and safety, many of which
are beyond the Corporation's control. 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 Fiscal 2024 annual MD&A. These factors are not
intended to represent a complete list of the factors that could
affect Cogeco Communications 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 Communications'
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 Fiscal
2024 Annual Report, the Corporation's consolidated financial
statements and the notes thereto prepared in accordance with
IFRS® Accounting Standards as issued by the
International Accounting Standards Board ("IFRS Accounting
Standards") for the year ended August 31,
2024.
Non-IFRS Accounting Standards and other financial
measures
This press release includes references to non-IFRS Accounting
Standards and other financial measures used by Cogeco
Communications. 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 Accounting Standards and other
financial measures to the most directly comparable IFRS Accounting
Standards measures are provided below. Certain additional
disclosures for non-IFRS Accounting Standards and other financial
measures used in this press release have been incorporated by
reference and can be found in the "Non-IFRS Accounting Standards
and other financial measures" section of the Corporation's
MD&A for the year ended August 31,
2024, available on SEDAR+ at www.sedarplus.ca. The following
non-IFRS Accounting Standards measures are used as a component of
Cogeco Communications' non-IFRS Accounting Standards ratios.
|
|
|
Specified non-IFRS
Accounting Standards measures
|
Used in the
component of the following non-IFRS Accounting Standards
ratios
|
|
Adjusted profit
attributable to owners of the Corporation
|
Adjusted diluted
earnings per share
|
|
Constant currency
basis
|
Change in constant
currency
|
|
Net capital
expenditures, excluding network expansion projects
|
Capital intensity,
excluding network expansion projects
|
|
|
Financial measures presented on a constant currency basis for
the three-month period and year ended August 31, 2024 are
translated at the average foreign exchange rate of the comparable
periods of the prior year, which were 1.3329 USD/CDN and
1.3467 USD/CDN, respectively.
Constant currency basis and foreign exchange impact
reconciliation
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
August 31
|
2024
|
|
2023
|
(1)
|
|
|
Change
|
|
|
(In thousands of
Canadian dollars, except percentages)
|
Actual
|
|
Foreign
exchange
impact
|
|
In
constant
currency
|
|
Actual
|
|
Actual
|
|
In
constant
currency
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
|
Revenue
|
747,751
|
|
(9,731)
|
|
738,020
|
|
743,397
|
|
0.6
|
|
(0.7)
|
|
|
Operating
expenses
|
372,095
|
|
(5,234)
|
|
366,861
|
|
388,381
|
|
(4.2)
|
|
(5.5)
|
|
|
Management fees –
Cogeco Inc.
|
5,238
|
|
—
|
|
5,238
|
|
3,716
|
|
41.0
|
|
41.0
|
|
|
Adjusted
EBITDA
|
370,418
|
|
(4,497)
|
|
365,921
|
|
351,300
|
|
5.4
|
|
4.2
|
|
|
Free cash flow
(1)
|
148,189
|
|
(462)
|
|
147,727
|
|
88,953
|
|
66.6
|
|
66.1
|
|
|
Net capital
expenditures
|
152,253
|
|
(2,254)
|
|
149,999
|
|
176,617
|
|
(13.8)
|
|
(15.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
During the fourth
quarter of fiscal 2024, the Corporation updated its free cash flow
calculation to include proceeds on disposals of property, plant and
equipment. Comparative figures were restated to conform to the
current presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended August
31
|
2024
|
|
2023
|
(1)
|
|
|
Change
|
|
|
(In thousands of
Canadian dollars, except percentages)
|
Actual
|
|
Foreign exchange
impact
|
|
In
constant
currency
|
|
Actual
|
|
Actual
|
|
In
constant
currency
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
|
Revenue
|
2,976,524
|
|
(15,024)
|
|
2,961,500
|
|
2,984,128
|
|
(0.3)
|
|
(0.8)
|
|
|
Operating
expenses
|
1,513,258
|
|
(8,121)
|
|
1,505,137
|
|
1,544,462
|
|
(2.0)
|
|
(2.5)
|
|
|
Management fees –
Cogeco Inc.
|
20,952
|
|
—
|
|
20,952
|
|
18,600
|
|
12.6
|
|
12.6
|
|
|
Adjusted
EBITDA
|
1,442,314
|
|
(6,903)
|
|
1,435,411
|
|
1,421,066
|
|
1.5
|
|
1.0
|
|
|
Free cash flow
(1)
|
476,021
|
|
(932)
|
|
475,089
|
|
418,056
|
|
13.9
|
|
13.6
|
|
|
Net capital
expenditures
|
637,833
|
|
(3,340)
|
|
634,493
|
|
699,506
|
|
(8.8)
|
|
(9.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
During the fourth
quarter of fiscal 2024, the Corporation updated its free cash flow
calculation to include proceeds on disposals of property, plant and
equipment. Comparative figures were restated to conform to the
current presentation.
|
Canadian telecommunications segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
August 31
|
2024
|
|
2023
|
|
|
|
Change
|
|
|
(In thousands of
Canadian dollars, except percentages)
|
Actual
|
|
Foreign
exchange
impact
|
|
In
constant
currency
|
|
Actual
|
|
Actual
|
|
In
constant
currency
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
|
Revenue
|
378,702
|
|
—
|
|
378,702
|
|
375,754
|
|
0.8
|
|
0.8
|
|
|
Operating
expenses
|
175,688
|
|
(288)
|
|
175,400
|
|
180,183
|
|
(2.5)
|
|
(2.7)
|
|
|
Adjusted
EBITDA
|
203,014
|
|
288
|
|
203,302
|
|
195,571
|
|
3.8
|
|
4.0
|
|
|
Net capital
expenditures
|
71,000
|
|
(245)
|
|
70,755
|
|
73,348
|
|
(3.2)
|
|
(3.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended August
31
|
2024
|
|
2023
|
|
|
|
Change
|
|
|
(In thousands of
Canadian dollars, except percentages)
|
Actual
|
|
Foreign
exchange
impact
|
|
In
constant
currency
|
|
Actual
|
|
Actual
|
|
In
constant
currency
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
|
Revenue
|
1,510,506
|
|
—
|
|
1,510,506
|
|
1,489,915
|
|
1.4
|
|
1.4
|
|
|
Operating
expenses
|
710,706
|
|
(447)
|
|
710,259
|
|
701,717
|
|
1.3
|
|
1.2
|
|
|
Adjusted
EBITDA
|
799,800
|
|
447
|
|
800,247
|
|
788,198
|
|
1.5
|
|
1.5
|
|
|
Net capital
expenditures
|
356,274
|
|
(463)
|
|
355,811
|
|
354,384
|
|
0.5
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American telecommunications segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
August 31
|
2024
|
|
2023
|
|
|
|
Change
|
|
|
(In thousands of
Canadian dollars, except percentages)
|
Actual
|
|
Foreign
exchange
impact
|
|
In
constant
currency
|
|
Actual
|
|
Actual
|
|
In
constant
currency
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
|
Revenue
|
369,049
|
|
(9,731)
|
|
359,318
|
|
367,643
|
|
0.4
|
|
(2.3)
|
|
|
Operating
expenses
|
185,588
|
|
(4,916)
|
|
180,672
|
|
193,172
|
|
(3.9)
|
|
(6.5)
|
|
|
Adjusted
EBITDA
|
183,461
|
|
(4,815)
|
|
178,646
|
|
174,471
|
|
5.2
|
|
2.4
|
|
|
Net capital
expenditures
|
76,238
|
|
(2,011)
|
|
74,227
|
|
100,488
|
|
(24.1)
|
|
(26.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended August
31
|
2024
|
|
2023
|
|
|
|
Change
|
|
|
(In thousands of
Canadian dollars, except percentages)
|
Actual
|
|
Foreign
exchange
impact
|
|
In
constant
currency
|
|
Actual
|
|
Actual
|
|
In
constant
currency
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
|
Revenue
|
1,466,018
|
|
(15,024)
|
|
1,450,994
|
|
1,494,213
|
|
(1.9)
|
|
(2.9)
|
|
|
Operating
expenses
|
759,658
|
|
(7,632)
|
|
752,026
|
|
800,409
|
|
(5.1)
|
|
(6.0)
|
|
|
Adjusted
EBITDA
|
706,360
|
|
(7,392)
|
|
698,968
|
|
693,804
|
|
1.8
|
|
0.7
|
|
|
Net capital
expenditures
|
267,728
|
|
(2,865)
|
|
264,863
|
|
336,910
|
|
(20.5)
|
|
(21.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted profit attributable to owners of the
Corporation
|
|
|
|
|
|
Three months ended
August 31
|
Years ended August
31
|
|
2024
|
2023
|
2024
|
2023
|
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
|
Profit for the
period attributable to owners of the Corporation
|
81,958
|
86,499
|
335,534
|
392,273
|
|
Impairment of property,
plant and equipment
|
14,862
|
—
|
14,862
|
—
|
|
Acquisition,
integration, restructuring and other costs
|
10,561
|
15,228
|
59,731
|
36,225
|
|
Loss on debt
extinguishment (1)
|
—
|
—
|
16,880
|
—
|
|
Tax impact for the
above items
|
(6,648)
|
(3,829)
|
(24,109)
|
(9,370)
|
|
Non-controlling
interest impact for the above items
|
(1,679)
|
(723)
|
(2,467)
|
(1,168)
|
|
Adjusted profit
attributable to owners of the Corporation
|
99,054
|
97,175
|
400,431
|
417,960
|
|
|
|
|
|
|
(1)
Included within financial expense.
|
Free cash flow and free cash flow, excluding network
expansion projects reconciliations
|
|
|
|
|
|
|
|
Three months ended
August 31
|
|
Years ended August
31
|
|
|
2024
|
2023
|
(1)
|
2024
|
2023
|
(1)
|
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
$
|
$
|
|
|
Cash flows from
operating activities
|
319,177
|
281,326
|
|
1,175,219
|
962,905
|
|
|
Changes in other
non-cash operating activities
|
(34,878)
|
(9,946)
|
|
(56,369)
|
97,851
|
|
|
Income taxes
paid
|
6,526
|
2,025
|
|
5,719
|
91,673
|
|
|
Current income
taxes
|
(553)
|
(5,708)
|
|
(20,147)
|
(32,067)
|
|
|
Interest
paid
|
71,695
|
65,489
|
|
266,464
|
239,648
|
|
|
Financial
expense
|
(61,925)
|
(70,222)
|
|
(277,690)
|
(251,642)
|
|
|
Loss on debt
extinguishment (2)
|
—
|
—
|
|
16,880
|
—
|
|
|
Amortization of
deferred transaction costs and discounts on long-term debt
(2)
|
2,190
|
3,195
|
|
9,143
|
12,601
|
|
|
Net capital
expenditures (3)
|
(152,253)
|
(176,617)
|
|
(637,833)
|
(699,506)
|
|
|
Proceeds on disposals
of property, plant and equipment (1)
|
594
|
1,037
|
|
3,378
|
2,651
|
|
|
Repayment of lease
liabilities
|
(2,384)
|
(1,626)
|
|
(8,743)
|
(6,058)
|
|
|
Free cash flow
(1)
|
148,189
|
88,953
|
|
476,021
|
418,056
|
|
|
Net capital
expenditures in connection with network expansion
projects
|
56,911
|
32,928
|
|
137,394
|
172,835
|
|
|
Free cash flow,
excluding network expansion projects (1)
|
205,100
|
121,881
|
|
613,415
|
590,891
|
|
|
|
|
|
|
|
|
|
(1)
|
During the fourth
quarter of fiscal 2024, the Corporation updated its calculation of
free cash flow and free cash flow, excluding network expansion
projects, to include proceeds on disposals of property, plant and
equipment. Comparative figures were restated to conform to the
current presentation.
|
|
(2)
|
Included within
financial expense.
|
|
(3)
|
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
August 31
|
Years ended August
31
|
|
2024
|
2023
|
2024
|
2023
|
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
|
Acquisition of
property, plant and equipment
|
154,260
|
205,570
|
659,090
|
802,830
|
|
Subsidies received in
advance recognized as a reduction of the cost of property, plant
and equipment during the period
|
(2,007)
|
(28,953)
|
(21,257)
|
(103,324)
|
|
Net capital
expenditures
|
152,253
|
176,617
|
637,833
|
699,506
|
|
|
|
|
|
Adjusted EBITDA reconciliation
|
|
|
|
|
|
Three months ended
August 31
|
Years ended August
31
|
|
2024
|
2023
|
2024
|
2023
|
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
|
Profit for the
period
|
85,484
|
91,797
|
354,132
|
417,972
|
|
Income taxes
|
15,225
|
18,119
|
62,342
|
94,761
|
|
Financial
expense
|
61,925
|
70,222
|
277,690
|
251,642
|
|
Impairment of property,
plant and equipment
|
14,862
|
—
|
14,862
|
—
|
|
Depreciation and
amortization
|
182,361
|
155,934
|
673,557
|
620,466
|
|
Acquisition,
integration, restructuring and other costs
|
10,561
|
15,228
|
59,731
|
36,225
|
|
Adjusted
EBITDA
|
370,418
|
351,300
|
1,442,314
|
1,421,066
|
|
|
|
|
|
Net capital expenditures and free cash flow excluding network
expansion projects reconciliations
Net capital expenditures
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
August 31
|
2024
|
|
2023
|
|
|
|
Change
|
|
(In thousands of
Canadian dollars, except percentages)
|
Actual
|
|
Foreign exchange
impact
|
|
In
constant
currency
|
|
Actual
|
|
Actual
|
|
In
constant
currency
|
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
Net capital
expenditures
|
152,253
|
|
(2,254)
|
|
149,999
|
|
176,617
|
|
(13.8)
|
|
(15.1)
|
|
Net capital
expenditures in connection with network expansion
projects
|
56,911
|
|
(576)
|
|
56,335
|
|
32,928
|
|
72.8
|
|
71.1
|
|
Net capital
expenditures, excluding network expansion projects
|
95,342
|
|
(1,678)
|
|
93,664
|
|
143,689
|
|
(33.6)
|
|
(34.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended August
31
|
2024
|
|
2023
|
|
|
|
Change
|
|
(In thousands of
Canadian dollars, except percentages)
|
Actual
|
|
Foreign exchange
impact
|
|
In
constant
currency
|
|
Actual
|
|
Actual
|
|
In
constant
currency
|
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
Net capital
expenditures
|
637,833
|
|
(3,340)
|
|
634,493
|
|
699,506
|
|
(8.8)
|
|
(9.3)
|
|
Net capital
expenditures in connection with network expansion
projects
|
137,394
|
|
(780)
|
|
136,614
|
|
172,835
|
|
(20.5)
|
|
(21.0)
|
|
Net capital
expenditures, excluding network expansion projects
|
500,439
|
|
(2,560)
|
|
497,879
|
|
526,671
|
|
(5.0)
|
|
(5.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
August 31
|
2024
|
|
2023
|
(1)
|
|
|
Change
|
|
(In thousands of
Canadian dollars, except percentages)
|
Actual
|
|
Foreign exchange
impact
|
|
In
constant
currency
|
|
Actual
|
|
Actual
|
|
In
constant
currency
|
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
Free cash flow
(1)
|
148,189
|
|
(462)
|
|
147,727
|
|
88,953
|
|
66.6
|
|
66.1
|
|
Net capital
expenditures in connection with network expansion
projects
|
56,911
|
|
(576)
|
|
56,335
|
|
32,928
|
|
72.8
|
|
71.1
|
|
Free cash flow,
excluding network expansion projects (1)
|
205,100
|
|
(1,038)
|
|
204,062
|
|
121,881
|
|
68.3
|
|
67.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
During the fourth
quarter of fiscal 2024, the Corporation updated its calculation of
free cash flow and free cash flow, excluding network expansion
projects, to include proceeds on disposals of property, plant
and equipment. Comparative figures were restated to conform to the
current presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended August
31
|
2024
|
|
2023
|
(1)
|
|
|
Change
|
|
(In thousands of
Canadian dollars, except percentages)
|
Actual
|
|
Foreign exchange
impact
|
|
In
constant
currency
|
|
Actual
|
|
Actual
|
|
In
constant
currency
|
|
$
|
|
$
|
|
$
|
|
$
|
|
%
|
|
%
|
|
Free cash flow
(1)
|
476,021
|
|
(932)
|
|
475,089
|
|
418,056
|
|
13.9
|
|
13.6
|
|
Net capital
expenditures in connection with network expansion
projects
|
137,394
|
|
(780)
|
|
136,614
|
|
172,835
|
|
(20.5)
|
|
(21.0)
|
|
Free cash flow,
excluding network expansion projects (1)
|
613,415
|
|
(1,712)
|
|
611,703
|
|
590,891
|
|
3.8
|
|
3.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
During the fourth
quarter of fiscal 2024, the Corporation updated its calculation of
free cash flow and free cash flow, excluding network expansion
projects, to include proceeds on disposals of property, plant
and equipment. Comparative figures were restated to conform to the
current presentation.
|
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 Communications Inc.
Cogeco Communications Inc. is a leading telecommunications
provider committed to bringing people together through powerful
communications and entertainment experiences. We provide
world-class Internet, video and wireline phone services to 1.6
million residential and business subscribers in Canada and thirteen states in the United States. We also offer wireless
services in most of our U.S. operating territory. Our services are
marketed under the Cogeco and oxio brands in Canada, and under the Breezeline brand in the
U.S. We take pride in our strong presence in the communities we
serve and in our commitment to a sustainable future. Cogeco
Communications Inc.'s subordinate voting shares are listed on the
Toronto Stock Exchange (TSX: CCA).
For information:
Investors
Troy
Crandall
Head, Investor Relations
Cogeco Communications Inc.
Tel.: 514 764-4600
troy.crandall@cogeco.com
Media
Claudja Joseph
Director, Communications & DEI
Cogeco Communications Inc.
Tel.: 514 764-4600
claudja.joseph@cogeco.com
|
Conference
Call:
|
Friday, November
1st, 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
Communications' 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 Communications' 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 Communications Inc.
