- Revenue increased by 1.2% (decrease of 1.6% in constant currency(1)) compared to the same period of the prior year to
$757.2 million ; - Adjusted EBITDA(1) was
$351.7 million , an increase of 0.7% (decrease of 1.8% in constant currency(1)); - Profit for the period amounted to
$102.6 million , a decrease of 13.6%; - Earnings per share on a diluted basis was
$2.15 , a decrease of 6.1%; - Net capital expenditures(1)(2) amounted to
$156 .8 million, an increase of 10.1% (4.6% in constant currency(1)). - Excluding network expansion projects(1), net capital expenditures amounted to
$114 .6 million, an increase of 8.6% (2.5% in constant currency(1)); - Acquisition of property, plant and equipment amounted to
$173.7 million , an increase of 9.8%; - Free cash flow(1) amounted to
$118.3 million , a decrease of 23.0% (21.6% in constant currency(1)) due to increased net capital expenditures and interest paid. - Free cash flow, excluding network expansion projects(1) was
$160 .6 million, a decrease of 15.8% (15.4% in constant currency(1)); - Cash flows from operating activities decreased by 25.8% to
$206.8 million , mainly resulting from working capital items; - Purchased and cancelled 117,584 Cogeco subordinate voting shares for a total consideration of
$6 .9 million; - Cogeco maintains its fiscal 2023 financial guidelines; and
- A quarterly eligible dividend of
$0.731 per share was declared, compared to$0.625 per share in the comparable quarter of fiscal 2022, an increase of 17%.
"Our overall operating strategies proved to be effective in the context of more challenging economic and competitive environments," said Philippe Jetté, President and Chief Executive Officer of
"Our Canadian telecommunications business unit performed well in the quarter, which was marked by continued organic growth in our Internet customer base, both in our traditional markets and in our newly served areas, resulting in growing adjusted EBITDA and adjusted EBITDA margins," continued Mr. Jetté. "In addition, the acquisition in March of the telecommunications operations of oxio is a great addition to our service offering and brings a second brand to serve the telecommunications needs of Canadians."
"With respect to our
"In our broadcasting operations, while the advertising market remains challenging,
"I am pleased to highlight that we recently published our annual ESG and Sustainability Report as well as our Climate Action Plan, in which we respectively provide an update of our environmental, social and governance commitments, initiatives and performance and outline the key steps we are taking in support of urgent climate action," continued Mr. Jetté. "We are also very proud to be, for the fourth consecutive year, ranked among the 100 most sustainable companies in the world by
Operating results
For the second quarter of fiscal 2023:
- Revenue increased by 1.2% to reach
$757.2 million . On a constant currency basis, revenue decreased by 1.6%, driven by a lower customer base in the American telecommunications segment offset by a growth in the Canadian telecommunications segment and in the media activities, which is further explained as follows: - Canadian telecommunications' revenue increased by 1.7% as reported and in constant currency, mainly driven by the cumulative effect of high-speed Internet service additions over the past year and higher revenue per customer.
- American telecommunications' revenue decreased by 5.2% on a constant currency basis (increase of 0.6% as reported), mainly due to a lower customer base following customer losses in
Ohio and an overall decline in video and phone service customers, offset in part by the cumulative effect of high-speed Internet service additions outsideOhio over the past year, higher revenue per customer and a better product mix. - Revenue in the media activities increased by 5.3%.
- Adjusted EBITDA increased by 0.7% to reach
$351.7 million . On a constant currency basis, adjusted EBITDA decreased by 1.8%, mainly due to a decline in the American telecommunications segment partly offset by an adjusted EBITDA growth in the Canadian telecommunications segment, as further explained below: - Canadian telecommunications adjusted EBITDA increased by 2.6%, or 3.1% in constant currency, mostly driven by revenue growth.
- American telecommunications adjusted EBITDA decreased by 2.2%, or 7.8% in constant currency, mainly resulting from lower revenue, combined with higher operating expenses as last year's marketing and advertising spending and staff costs were unusually low in
Ohio while operating under the previous owner's brand. - Profit for the period amounted to
$102.6 million , of which$33.8 million , or$2.15 per diluted share, was attributable to owners of the Corporation compared to$118.8 million ,$36.7 million , and$2.29 per diluted share, respectively, in the comparable period of fiscal 2022. The decreases resulted mainly from higher financial expense, acquisition, integration, restructuring and other costs and depreciation and amortization expense, partly offset by lower income taxes. - Net capital expenditures, which account for construction subsidies, were
$156.8 million , an increase of 10.1% compared to$142.5 million in the same period of the prior year. In constant currency, net capital expenditures were$149.1 million , an increase of 4.6% compared to last year, driven by accelerated network expansion activities inCanada . - Excluding network expansion projects, net capital expenditures were
$114.6 million , an increase of 8.6% compared to$105.5 million in the same period of the prior year. In constant currency, net capital expenditures excluding network expansion projects(1) were$108 .1 million, an increase of 2.5% compared to last year. - Fibre-to-the-home network expansion projects continued in both
Canada andthe United States , with unprecedented homes passed additions of more than 140,000 since the beginning of last year, of which approximately 70,000 were added during the first half of fiscal 2023 in addition to the 70,000 added in fiscal 2022. - Acquisition of property, plant and equipment increased by 9.8% to
$173.7 million , mainly due to network expansion projects inCanada . - Free cash flow decreased by 23.0%, or 21.6% in constant currency, and amounted to
$118.3 million , mainly due to higher financial expense, lower adjusted EBITDA, and higher net capital expenditures and acquisition, integration, restructuring and other costs. - Free cash flow, excluding network expansion projects decreased by 15.8%, or 15.4% in constant currency, and amounted to
$160.6 million . - Cash flows from operating activities decreased by 25.8% to reach
$206.8 million , driven by a net outflow in non-cash operating activities of$66.2 million compared to$25.4 million in the comparative period, resulting mostly from the timing of trade and other payables, as well as an increase in income taxes and interest paid. - Cogeco purchased and cancelled 117,584 subordinate voting shares for a total consideration of
$6 .9 million, compared to 154,388 subordinate voting shares purchased and cancelled in the comparable quarter of fiscal 2022, for a total consideration of$12 .3 million. - Cogeco maintains its fiscal 2023 financial guidelines as issued on
January 13, 2023 . - At its
April 13, 2023 meeting, the Board of Directors of Cogeco declared a quarterly eligible dividend of$0.731 per share, an increase of 17% compared to$0.625 per share in the comparable quarter of fiscal 2022.
(1) | Adjusted EBITDA and net capital expenditures are total of segments measures. Constant currency basis, 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 is a non-IFRS ratio. 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. |
Financial highlights
Three and six months ended | 2023 | 2022 | (1) | Change | Change in constant | (2) (3) | 2023 | 2022 | (1) | Change | Change in constant | (2) (3) |
(In thousands of Canadian dollars, | $ | $ | % | % | $ | $ | % | % | ||||
Operations | ||||||||||||
Revenue | 757,191 | 748,066 | 1.2 | (1.6) | 1,546,881 | 1,493,324 | 3.6 | 0.4 | ||||
Adjusted EBITDA (3) | 351,663 | 349,211 | 0.7 | (1.8) | 725,545 | 703,605 | 3.1 | 0.3 | ||||
Acquisition, integration, restructuring | 6,952 | 1,451 | — | 9,629 | 20,086 | (52.1) | ||||||
Profit for the period | 102,592 | 118,781 | (13.6) | 226,400 | 237,920 | (4.8) | ||||||
Profit for the period attributable to | 33,788 | 36,659 | (7.8) | 75,869 | 75,182 | 0.9 | ||||||
Cash flow | ||||||||||||
Cash flows from operating activities | 206,843 | 278,768 | (25.8) | 400,664 | 576,110 | (30.5) | ||||||
Free cash flow (3) | 118,331 | 153,703 | (23.0) | (21.6) | 227,814 | 289,523 | (21.3) | (20.4) | ||||
Free cash flow, excluding network | 160,573 | 190,685 | (15.8) | (15.4) | 335,890 | 346,521 | (3.1) | (3.6) | ||||
Acquisition of property, plant and | 173,674 | 158,153 | 9.8 | 408,682 | 304,482 | 34.2 | ||||||
Net capital expenditures (1) (3) | 156,832 | 142,475 | 10.1 | 4.6 | 354,174 | 283,984 | 24.7 | 18.8 | ||||
Net capital expenditures, excluding | 114,590 | 105,493 | 8.6 | 2.5 | 246,098 | 226,986 | 8.4 | 3.1 | ||||
Per share data (5) | ||||||||||||
Earnings per share | ||||||||||||
Basic | 2.17 | 2.30 | (5.7) | 4.85 | 4.73 | 2.5 | ||||||
Diluted | 2.15 | 2.29 | (6.1) | 4.82 | 4.70 | 2.6 | ||||||
Dividends | 0.731 | 0.625 | 17.0 | 1.462 | 1.250 | 17.0 | ||||||
As at |
| |
(In thousands of Canadian dollars) | $ | $ |
Financial condition | ||
Cash and cash equivalents | 355,871 | 379,001 |
Total assets | 9,810,322 | 9,468,025 |
Long-term debt | ||
Current | 342,963 | 340,468 |
Non-current | 4,726,279 | 4,398,142 |
Net indebtedness (3) | 4,832,174 | 4,545,809 |
Equity attributable to owners of the Corporation | 960,725 | 919,843 |
(1) | Comparative figures have been restated following the application of the IFRS Interpretations Committee issued agenda decision Demand Deposits with Restrictions on Use arising from a Contract with a Third Party (IAS 7 Statement of Cash Flows) during the third quarter of fiscal 2022. For further details, refer to the "Accounting policy developments" section of the fiscal 2023 second-quarter Management's Discussion and Analysis ("MD&A"). |
(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 and six-month periods ended |
(3) | Adjusted EBITDA and net capital expenditures are total of segments measures. 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 is a non-IFRS ratio. Net indebtedness is a capital management measure. 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. |
(4) | For the three and six-month periods ended |
(5) | Per multiple and subordinate voting share. |
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
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 six-month periods ended
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 six-month periods ended
Financial measures presented on a constant currency basis for the three and six-month periods ended
Constant currency basis and foreign exchange impact reconciliation
Consolidated
Three months ended | |||||||||||
Change | |||||||||||
2023 | Foreign | 2023 in constant | 2022 | Actual | In constant | ||||||
(In thousands of Canadian dollars, except | $ | $ | $ | $ | % | % | |||||
Revenue | 757,191 | (21,282) | 735,909 | 748,066 | 1.2 | (1.6) | |||||
Operating expenses | 405,528 | (12,585) | 392,943 | 398,855 | 1.7 | (1.5) | |||||
Adjusted EBITDA | 351,663 | (8,697) | 342,966 | 349,211 | 0.7 | (1.8) | |||||
Free cash flow | 118,331 | 2,114 | 120,445 | 153,703 | (23.0) | (21.6) | |||||
Net capital expenditures | 156,832 | (7,774) | 149,058 | 142,475 | 10.1 | 4.6 | |||||
Six months ended | |||||||||||
Change | |||||||||||
2023 | Foreign | 2023 in constant | 2022 | Actual | In constant | ||||||
(In thousands of Canadian dollars, except | $ | $ | $ | $ | % | % | |||||
Revenue | 1,546,881 | (48,192) | 1,498,689 | 1,493,324 | 3.6 | 0.4 | |||||
Operating expenses | 821,336 | (28,020) | 793,316 | 789,719 | 4.0 | 0.5 | |||||
Adjusted EBITDA | 725,545 | (20,172) | 705,373 | 703,605 | 3.1 | 0.3 | |||||
Free cash flow | 227,814 | 2,708 | 230,522 | 289,523 | (21.3) | (20.4) | |||||
Net capital expenditures | 354,174 | (16,678) | 337,496 | 283,984 | 24.7 | 18.8 | |||||
Canadian telecommunications segment
Three months ended | |||||||||||
Change | |||||||||||
2023 | Foreign | 2023 in constant | 2022 | Actual | In constant | ||||||
(In thousands of Canadian dollars, except | $ | $ | $ | $ | % | % | |||||
Revenue | 368,334 | — | 368,334 | 362,323 | 1.7 | 1.7 | |||||
Operating expenses | 170,289 | (893) | 169,396 | 169,307 | 0.6 | 0.1 | |||||
Adjusted EBITDA | 198,045 | 893 | 198,938 | 193,016 | 2.6 | 3.1 | |||||
Net capital expenditures | 81,383 | (3,551) | 77,832 | 67,763 | 20.1 | 14.9 | |||||
Six months ended | |||||||||||
Change | |||||||||||
2023 | Foreign | 2023 in constant | 2022 | Actual | In constant | ||||||
(In thousands of Canadian dollars, except | $ | $ | $ | $ | % | % | |||||
Revenue | 740,418 | — | 740,418 | 717,370 | 3.2 | 3.2 | |||||
Operating expenses | 343,740 | (2,061) | 341,679 | 336,493 | 2.2 | 1.5 | |||||
Adjusted EBITDA | 396,678 | 2,061 | 398,739 | 380,877 | 4.1 | 4.7 | |||||
Net capital expenditures | 196,621 | (6,911) | 189,710 | 135,234 | 45.4 | 40.3 | |||||
American telecommunications segment
Three months ended | |||||||||||
Change | |||||||||||
2023 | Foreign | 2023 in constant | 2022 | Actual | In constant | ||||||
(In thousands of Canadian dollars, except | $ | $ | $ | $ | % | % | |||||
Revenue | 368,312 | (21,282) | 347,030 | 366,226 | 0.6 | (5.2) | |||||
Operating expenses | 202,254 | (11,692) | 190,562 | 196,436 | 3.0 | (3.0) | |||||
Adjusted EBITDA | 166,058 | (9,590) | 156,468 | 169,790 | (2.2) | (7.8) | |||||
Net capital expenditures | 73,091 | (4,223) | 68,868 | 73,178 | (0.1) | (5.9) | |||||
Six months ended | |||||||||||
Change | |||||||||||
2023 | Foreign | 2023 in constant | 2022 | Actual | In constant | ||||||
(In thousands of Canadian dollars, except | $ | $ | $ | $ | % | % | |||||
Revenue | 758,528 | (48,192) | 710,336 | 729,720 | 3.9 | (2.7) | |||||
Operating expenses | 409,964 | (25,959) | 384,005 | 384,166 | 6.7 | — | |||||
Adjusted EBITDA | 348,564 | (22,233) | 326,331 | 345,554 | 0.9 | (5.6) | |||||
Net capital expenditures | 153,499 | (9,767) | 143,732 | 146,405 | 4.8 | (1.8) | |||||
Free cash flow reconciliation
Three months ended | Six months ended | |||
2023 | 2022 | 2023 | 2022 | |
(In thousands of Canadian dollars) | $ | $ | $ | $ |
Cash flows from operating activities | 206,843 | 278,768 | 400,664 | 576,110 |
Amortization of deferred transaction costs and discounts on long-term | 3,045 | 3,010 | 6,107 | 5,952 |
Changes in other non-cash operating activities | 66,172 | 25,435 | 136,121 | 5,706 |
Income taxes paid | 23,319 | 5,137 | 70,612 | 31,473 |
Current income taxes | (11,332) | (10,149) | (20,622) | (25,698) |
Interest paid | 51,064 | 40,809 | 112,270 | 73,681 |
Financial expense | (61,985) | (45,486) | (119,512) | (91,094) |
Net capital expenditures | (156,832) | (142,475) | (354,174) | (283,984) |
Repayment of lease liabilities | (1,963) | (1,346) | (3,652) | (2,623) |
Free cash flow | 118,331 | 153,703 | 227,814 | 289,523 |
(1) | Included within financial expense. |
Net capital expenditures reconciliation
Three months ended | Six months ended | |||||
2023 | 2022 | (1) | 2023 | 2022 | (1) | |
(In thousands of Canadian dollars) | $ | $ | $ | $ | ||
Acquisition of property, plant and equipment | 173,674 | 158,153 | 408,682 | 304,482 | ||
Subsidies received in advance recognized as a reduction of the cost | (16,842) | (15,678) | (54,508) | (20,498) | ||
Net capital expenditures | 156,832 | 142,475 | 354,174 | 283,984 | ||
(1) | Comparative figures have been restated. For further details, refer to the "Accounting policy developments" section of the fiscal 2023 second-quarter MD&A. |
Adjusted EBITDA reconciliation
Three months ended | Six months ended | |||
2023 | 2022 | 2023 | 2022 | |
(In thousands of Canadian dollars) | $ | $ | $ | $ |
Profit for the period | 102,592 | 118,781 | 226,400 | 237,920 |
Income taxes | 24,801 | 32,182 | 58,281 | 50,565 |
Financial expense | 61,985 | 45,486 | 119,512 | 91,094 |
Depreciation and amortization | 155,333 | 151,311 | 311,723 | 303,940 |
Acquisition, integration, restructuring and other costs | 6,952 | 1,451 | 9,629 | 20,086 |
Adjusted EBITDA | 351,663 | 349,211 | 725,545 | 703,605 |
Net capital expenditures and free cash flow excluding network expansion projects reconciliations
Net capital expenditures
Three months ended | |||||||||||
Change | |||||||||||
2023 | Foreign | 2023 in constant | 2022 | Actual | In constant | ||||||
(In thousands of Canadian dollars, except percentages) | $ | $ | $ | $ | % | % | |||||
Net capital expenditures | 156,832 | (7,774) | 149,058 | 142,475 | 10.1 | 4.6 | |||||
Net capital expenditures in connection with | 42,242 | (1,322) | 40,920 | 36,982 | 14.2 | 10.6 | |||||
Net capital expenditures, excluding network | 114,590 | (6,452) | 108,138 | 105,493 | 8.6 | 2.5 | |||||
Six months ended | |||||||||||
Change | |||||||||||
2023 | Foreign | 2023 in constant | 2022 | Actual | In constant | ||||||
(In thousands of Canadian dollars, except | $ | $ | $ | $ | % | % | |||||
Net capital expenditures | 354,174 | (16,678) | 337,496 | 283,984 | 24.7 | 18.8 | |||||
Net capital expenditures in connection with | 108,076 | (4,684) | 103,392 | 56,998 | 89.6 | 81.4 | |||||
Net capital expenditures, excluding network | 246,098 | (11,994) | 234,104 | 226,986 | 8.4 | 3.1 | |||||
Free cash flow
Three months ended | |||||||||||
Change | |||||||||||
2023 | Foreign | 2023 in constant | 2022 | Actual | In constant | ||||||
(In thousands of Canadian dollars, except | $ | $ | $ | $ | % | % | |||||
Free cash flow | 118,331 | 2,114 | 120,445 | 153,703 | (23.0) | (21.6) | |||||
Net capital expenditures in connection with | 42,242 | (1,322) | 40,920 | 36,982 | 14.2 | 10.6 | |||||
Free cash flow, excluding network expansion | 160,573 | 792 | 161,365 | 190,685 | (15.8) | (15.4) | |||||
Six months ended | |||||||||||
Change | |||||||||||
2023 | Foreign | 2023 in constant | 2022 | Actual | In constant | ||||||
(In thousands of Canadian dollars, except | $ | $ | $ | $ | % | % | |||||
Free cash flow | 227,814 | 2,708 | 230,522 | 289,523 | (21.3) | (20.4) | |||||
Net capital expenditures in connection with | 108,076 | (4,684) | 103,392 | 56,998 | 89.6 | 81.4 | |||||
Free cash flow, excluding network expansion | 335,890 | (1,976) | 333,914 | 346,521 | (3.1) | (3.6) | |||||
Additional information
Additional information relating to the Corporation is available on the SEDAR website at www.sedar.com and on the Corporation's website at corpo.cogeco.com.
About
Rooted in the communities it serves,
For information:
Investors
Senior Vice President and Chief Financial Officer
Tel.: 514-764-4700
patrice.ouimet@cogeco.com
Media
Marie-Hélène Labrie
Senior Vice President and Chief Public Affairs, Communications and Strategy Officer
Tel.: 514-764-4700
marie-helene.labrie@cogeco.com
Conference Call: | |
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SOURCE
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