- 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 2.5% to $743.4
million compared to the same period of the prior
year;
- Adjusted EBITDA(1) of $351.3 million increased 1.2% over last
year;
- Profit for the period amounted to $91.8 million, a decrease of 17.9%, mainly due to
higher financial expense. Profit for the period attributable to
owners of the Corporation amounted to $86.5
million, a decrease of 17.6%;
- Free cash flow(1) amounted to $87.9 million compared to $34.5 million last year due to lower net capital
expenditures, while cash flows from operating activities decreased
by 11.8% to $281.3 million. Free cash
flow, excluding network expansion projects(1) was
$120.8 million, an increase of
25.8%;
- Cogeco Communications is releasing its fiscal 2024
financial guidelines; and
- Declared a quarterly eligible dividend of $0.854 per share, representing a 10.1% increase
over last year.
- For fiscal 2023, free cash flow dividend payout
ratio(1) was 33% (or 23% excluding network expansion
projects(1))
MONTRÉAL, Nov. 1, 2023
/CNW/ - Today, Cogeco Communications Inc. (TSX: CCA) ("Cogeco
Communications" 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 Communications 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.
As such, the Corporation is pleased to announce a further 10.1%
increase in its dividend today, marking a full decade of
consecutive annual dividend increases of 10% or greater."
"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
|
743,397
|
|
725,446
|
|
2.5
|
0.8
|
|
Adjusted EBITDA
(1)
|
351,300
|
|
347,074
|
|
1.2
|
(0.3)
|
|
Adjusted EBITDA margin
(1)
|
47.3 %
|
|
47.8 %
|
|
|
|
|
Profit for the
period
|
91,797
|
|
111,829
|
|
(17.9)
|
|
|
Profit for the period
attributable to owners of the Corporation
|
86,499
|
|
104,937
|
|
(17.6)
|
|
|
Adjusted profit
attributable to owners of the Corporation
(1)(3)
|
97,175
|
|
113,478
|
|
(14.4)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
281,326
|
|
319,137
|
|
(11.8)
|
|
|
Free cash flow
(1)
|
87,916
|
|
34,452
|
|
—
|
—
|
|
Free cash flow,
excluding network expansion projects (1)
|
120,844
|
|
96,084
|
|
25.8
|
25.5
|
|
|
|
|
|
|
|
|
|
Acquisition of
property, plant and equipment
|
205,570
|
|
243,589
|
|
(15.6)
|
|
|
Net capital
expenditures (1)(2)
|
176,617
|
|
223,509
|
|
(21.0)
|
(22.7)
|
|
Net capital
expenditures, excluding network expansion projects
(1)
|
143,689
|
|
161,877
|
|
(11.2)
|
(13.1)
|
|
|
|
|
|
|
|
|
|
Capital intensity
(1)
|
23.8 %
|
|
30.8 %
|
|
|
|
|
Capital intensity,
excluding network expansion projects (1)
|
19.3 %
|
|
22.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
1.95
|
|
2.28
|
|
(14.5)
|
|
|
Adjusted diluted
earnings per share (1) (3)
|
2.19
|
|
2.46
|
|
(11.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating results
For the fourth quarter of fiscal 2023:
- Revenue increased by 2.5% to $743.4
million. On a constant currency basis, revenue increased by
0.8%, driven by growth in the Canadian telecommunications segment,
which was 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.
- 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 1.2% to reach $351.3 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 $91.8
million, of which $86.5
million, or $1.95 per diluted
share, was attributable to owners of the Corporation compared to
$111.8 million, $104.9 million, and $2.28 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 $97.2
million, or $2.19 per diluted
share(3), compared to $113.5
million, or $2.46 per diluted
share, last year.
- Net capital expenditures, which account for network expansion
subsidies, were $176.6 million, a
decrease of 21.0%, compared to $223.5
million in the same period of the prior year. In constant
currency, net capital expenditures(1) were $172.7 million, a decrease of 22.7% 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 $143.7 million, a decrease of
11.2% compared to $161.9 million in
the same period of the prior year. In constant currency, net
capital expenditures, excluding network expansion
projects(1) were $140.7
million, a decrease of 13.1% 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.
- Capital intensity was 23.8% compared to 30.8% last year.
Excluding network expansion projects, capital intensity was 19.3%
compared to 22.3% in the same period of the prior year.
- Acquisition of property, plant and equipment decreased by 15.6%
to $205.6 million, due to reduced
capital spending in both countries.
- Free cash flow amounted to $87.9
million, or $88.5 million in
constant currency, compared to $34.5
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 $120.8 million, or $120.6 million in constant currency, an increase
of 25.8%, or 25.5% in constant currency, compared to the same
period of the prior year.
- Cash flows from operating activities decreased by 11.8% to
reach $281.3 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 Communications declared a
quarterly eligible dividend of $0.854
per share, an increase of 10.1% compared to $0.776 per share last year.
FISCAL 2024 FINANCIAL GUIDELINES
Cogeco Communications 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
|
|
2,984
|
Adjusted
EBITDA
|
Stable
|
|
1,421
|
Net capital
expenditures
|
$700 to
$775
|
|
700
|
Net capital
expenditures in connection with network expansion
projects
|
$140 to
$190
|
|
173
|
Capital
intensity
|
24% to
26%
|
|
23.4 %
|
Capital intensity,
excluding network expansion projects
|
18% to
20%
|
|
17.6 %
|
Free cash
flow
|
(5)% to
(15)%
|
(3)
|
415
|
Free cash flow,
excluding network expansion projects
|
(5)% to
(15)%
|
(3)
|
588
|
|
|
|
|
(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 Communications, and should be read in
conjunction with the "Forward-looking statements" section of this
press release.
(1)
|
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 financial
measures. Change in constant currency, capital intensity, excluding
network expansion projects, adjusted diluted earnings per share,
free cash flow dividend payout ratio and free cash flow, excluding
network expansion projects, dividend payout ratio 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.
|
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
|
743,397
|
725,446
|
2.5
|
0.8
|
|
2,984,128
|
2,900,654
|
2.9
|
—
|
|
Adjusted EBITDA
(2)
|
351,300
|
347,074
|
1.2
|
(0.3)
|
|
1,421,066
|
1,393,062
|
2.0
|
(0.6)
|
|
Adjusted EBITDA margin
(2)
|
47.3 %
|
47.8 %
|
|
|
|
47.6 %
|
48.0 %
|
|
|
|
Acquisition,
integration, restructuring and other costs
(3)
|
15,228
|
12,593
|
20.9
|
|
|
36,225
|
34,942
|
3.7
|
|
|
Profit for the
period
|
91,797
|
111,829
|
(17.9)
|
|
|
417,972
|
453,756
|
(7.9)
|
|
|
Profit for the period
attributable to owners of the Corporation
|
86,499
|
104,937
|
(17.6)
|
|
|
392,273
|
423,299
|
(7.3)
|
|
|
Adjusted profit
attributable to owners of the Corporation
(2)(4)
|
97,175
|
113,478
|
(14.4)
|
|
|
417,960
|
445,219
|
(6.1)
|
|
|
Cash
flow
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
281,326
|
319,137
|
(11.8)
|
|
|
962,905
|
1,240,282
|
(22.4)
|
|
|
Free cash flow
(2)
|
87,916
|
34,452
|
—
|
—
|
|
415,405
|
424,358
|
(2.1)
|
(1.4)
|
|
Free cash flow,
excluding network expansion projects (2)
|
120,844
|
96,084
|
25.8
|
25.5
|
|
588,240
|
581,647
|
1.1
|
0.5
|
|
Acquisition of
property, plant and equipment
|
205,570
|
243,589
|
(15.6)
|
|
|
802,830
|
744,655
|
7.8
|
|
|
Net capital
expenditures (2)
|
176,617
|
223,509
|
(21.0)
|
(22.7)
|
|
699,506
|
688,913
|
1.5
|
(2.4)
|
|
Net capital
expenditures, excluding network expansion projects
(2)
|
143,689
|
161,877
|
(11.2)
|
(13.1)
|
|
526,671
|
531,624
|
(0.9)
|
(4.8)
|
|
Capital intensity
(2)
|
23.8 %
|
30.8 %
|
|
|
|
23.4 %
|
23.8 %
|
|
|
|
Capital intensity,
excluding network expansion projects (2)
|
19.3 %
|
22.3 %
|
|
|
|
17.6 %
|
18.3 %
|
|
|
|
Per share data
(5)
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
1.95
|
2.29
|
(14.8)
|
|
|
8.78
|
9.16
|
(4.1)
|
|
|
Diluted
|
1.95
|
2.28
|
(14.5)
|
|
|
8.75
|
9.09
|
(3.7)
|
|
|
Adjusted diluted
(2)(4)
|
2.19
|
2.46
|
(11.0)
|
|
|
9.32
|
9.56
|
(2.5)
|
|
|
Dividends per
share
|
0.776
|
0.705
|
10.1
|
|
|
3.104
|
2.820
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
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 financial measures. Change in
constant currency, capital intensity, excluding network expansion
projects 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
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
|
362,921
|
370,899
|
Total assets
|
9,768,370
|
9,278,509
|
Long-term
debt
|
|
|
Current
|
41,765
|
339,096
|
Non-current
|
4,979,241
|
4,334,373
|
Net indebtedness
(1)
|
4,749,214
|
4,489,330
|
Equity attributable to
owners of the Corporation
|
2,957,797
|
2,751,080
|
Return on equity
(2)
|
13.7 %
|
16.4 %
|
|
|
|
(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
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
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 Communications 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 Communications 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. 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
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 which 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 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 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 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
Communications' non-IFRS ratios.
|
|
Specified non-IFRS
financial measures
|
Used in the
component of the following non-IFRS ratios
|
Adjusted profit
attributable to owners of the Corporation
|
Adjusted diluted
earnings per share
|
Constant currency
basis
|
Change in constant
currency
|
Net capital
expenditures, excluding network expansion projects
|
Capital intensity,
excluding network expansion projects
|
Free cash
flow
|
Free cash flow dividend
payout ratio
|
Free cash flow,
excluding network expansion projects
|
Free cash flow,
excluding network expansion projects, dividend payout
ratio
|
|
|
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
|
743,397
|
|
(12,037)
|
|
731,360
|
|
725,446
|
|
2.5
|
|
0.8
|
|
Operating
expenses
|
388,381
|
|
(6,686)
|
|
381,695
|
|
372,797
|
|
4.2
|
|
2.4
|
|
Management fees –
Cogeco Inc.
|
3,716
|
|
—
|
|
3,716
|
|
5,575
|
|
(33.3)
|
|
(33.3)
|
|
Adjusted
EBITDA
|
351,300
|
|
(5,351)
|
|
345,949
|
|
347,074
|
|
1.2
|
|
(0.3)
|
|
Free cash
flow
|
87,916
|
|
599
|
|
88,515
|
|
34,452
|
|
—
|
|
—
|
|
Net capital
expenditures
|
176,617
|
|
(3,906)
|
|
172,711
|
|
223,509
|
|
(21.0)
|
|
(22.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
2,984,128
|
|
(83,268)
|
|
2,900,860
|
|
2,900,654
|
|
2.9
|
|
—
|
|
Operating
expenses
|
1,544,462
|
|
(47,115)
|
|
1,497,347
|
|
1,485,292
|
|
4.0
|
|
0.8
|
|
Management fees –
Cogeco Inc.
|
18,600
|
|
—
|
|
18,600
|
|
22,300
|
|
(16.6)
|
|
(16.6)
|
|
Adjusted
EBITDA
|
1,421,066
|
|
(36,153)
|
|
1,384,913
|
|
1,393,062
|
|
2.0
|
|
(0.6)
|
|
Free cash
flow
|
415,405
|
|
2,952
|
|
418,357
|
|
424,358
|
|
(2.1)
|
|
(1.4)
|
|
Net capital
expenditures
|
699,506
|
|
(27,345)
|
|
672,161
|
|
688,913
|
|
1.5
|
|
(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
|
86,499
|
104,937
|
392,273
|
423,299
|
Acquisition,
integration, restructuring and other costs
|
15,228
|
12,593
|
36,225
|
34,942
|
Tax impact for the
above items
|
(3,829)
|
(3,295)
|
(9,370)
|
(9,039)
|
Non-controlling
interest impact for the above items
|
(723)
|
(757)
|
(1,168)
|
(3,983)
|
Adjusted profit
attributable to owners of the Corporation
|
97,175
|
113,478
|
417,960
|
445,219
|
|
|
|
|
|
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
|
281,326
|
319,137
|
962,905
|
1,240,282
|
Amortization of
deferred transaction costs and discounts on long-term debt
(1)
|
3,195
|
2,974
|
12,601
|
11,815
|
Changes in other
non-cash operating activities
|
(9,946)
|
(30,026)
|
97,851
|
(74,840)
|
Income taxes
paid
|
2,025
|
6,871
|
91,673
|
36,563
|
Current income
taxes
|
(5,708)
|
(27,430)
|
(32,067)
|
(69,513)
|
Interest
paid
|
65,489
|
39,882
|
239,648
|
161,019
|
Financial
expense
|
(70,222)
|
(52,349)
|
(251,642)
|
(187,617)
|
Net capital
expenditures
|
(176,617)
|
(223,509)
|
(699,506)
|
(688,913)
|
Repayment of lease
liabilities
|
(1,626)
|
(1,098)
|
(6,058)
|
(4,438)
|
Free cash
flow
|
87,916
|
34,452
|
415,405
|
424,358
|
|
|
|
|
|
(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
|
205,570
|
243,589
|
802,830
|
744,655
|
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
|
176,617
|
223,509
|
699,506
|
688,913
|
|
|
|
|
|
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
|
91,797
|
111,829
|
417,972
|
453,756
|
Income taxes
|
18,119
|
17,290
|
94,761
|
95,663
|
Financial
expense
|
70,222
|
52,349
|
251,642
|
187,617
|
Depreciation and
amortization
|
155,934
|
153,013
|
620,466
|
621,084
|
Acquisition,
integration, restructuring and other costs
|
15,228
|
12,593
|
36,225
|
34,942
|
Adjusted
EBITDA
|
351,300
|
347,074
|
1,421,066
|
1,393,062
|
|
|
|
|
|
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
|
176,617
|
|
(3,906)
|
|
172,711
|
|
223,509
|
|
(21.0)
|
|
(22.7)
|
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
|
143,689
|
|
(3,016)
|
|
140,673
|
|
161,877
|
|
(11.2)
|
|
(13.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
699,506
|
|
(27,345)
|
|
672,161
|
|
688,913
|
|
1.5
|
|
(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
|
526,671
|
|
(20,795)
|
|
505,876
|
|
531,624
|
|
(0.9)
|
|
(4.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
87,916
|
|
599
|
|
88,515
|
|
34,452
|
|
—
|
|
—
|
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
|
120,844
|
|
(291)
|
|
120,553
|
|
96,084
|
|
25.8
|
|
25.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
415,405
|
|
2,952
|
|
418,357
|
|
424,358
|
|
(2.1)
|
|
(1.4)
|
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
|
588,240
|
|
(3,598)
|
|
584,642
|
|
581,647
|
|
1.1
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
Rooted in the communities it serves, Cogeco Communications Inc.
is a growing competitive force in the North American
telecommunications sector, serving 1.6 million residential and
business customers. Through its business units Cogeco Connexion and
Breezeline, Cogeco Communications provides Internet, video and
phone services in Canada as well
as in thirteen states in the United
States. Cogeco Communications Inc.'s subordinate voting
shares are listed on the Toronto Stock Exchange (TSX: CCA).
For information:
Investors
Patrice
Ouimet
Senior Vice President and Chief Financial Officer
Cogeco Communications Inc.
Tel.: 514-764-4600
patrice.ouimet@cogeco.com
Troy Crandall
Head, Investor Relations
Cogeco Communications 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 Communications 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 Communications' website at
https://corpo.cogeco.com/cca/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 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
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 Communications Inc.