Cogeco Communications Releases its Financial Results for the Second Quarter of Fiscal 2024
- Cogeco Connexion reported a fifth consecutive quarter of strong Internet subscriber growth, driven by a mix of new customers added under the Cogeco brand, which include fibre-to-the-home network expansions, and its digital oxio brand.
- Breezeline to launch mobile service within its U.S. broadband footprint starting this spring.
- Revenue declined by 0.8% compared to the same period last year to $730.5 million, as revenue growth at Cogeco Connexion was offset by lower revenue at Breezeline.
- Adjusted EBITDA(1) of $347.1 million decreased by 1.2% over last year, in line with our expectations. Profit for the period amounted to $96.6 million, a decrease of 7.4%, of which $93.7 million was attributable to owners of the Corporation.
- Earnings per share on a diluted basis increased to $2.20 from $2.19 in the second quarter of fiscal 2023, reflecting the benefit of the Corporation's repurchase and cancellation of shares.
- Free cash flow(1) amounted to $100.2 million, a decrease of 15.1% compared to last year, due to higher net capital expenditures, while cash flow from operating activities increased by 40.6% to $285.4 million. Free cash flow, excluding network expansion projects(1) decreased by 22.2% to $124.5 million.
- Cogeco Communications maintains its fiscal 2024 financial guidelines.
- A quarterly dividend of $0.854 per share was declared, representing a 10.1% increase over the prior year.
MONTRÉAL, April 11, 2024 /CNW/ - Today, Cogeco Communications Inc. (TSX: CCA) ("Cogeco Communications" or the "Corporation") announced its financial results for the second quarter ended February 29, 2024.
"During the quarter, we continued to execute on multiple initiatives, including pursuing several fibre-to-the-home network expansion projects," stated Frédéric Perron, President and Chief Executive Officer of Cogeco Communications Inc. "We also leveraged the technological enhancements we have made to our networks to drive growth in our Internet customer base, notably those subscribing to higher speeds. On the wireless front, we recently announced the launch of Breezeline Mobile, using a capital-light MVNO approach, and are making progress with our wireless preparations in Canada."
"While we operate in a challenging environment, value creation continues to be at the forefront of our strategy and culture. Our plans will therefore place a strong focus on driving profitable growth through digitization and operational effectiveness," continued Mr. Perron. "I look forward to leading Cogeco Communications on its ambitious path of delivering high-quality and cost-effective telecommunications services to our customers across both of the countries we serve. I want to thank all of our customers and stakeholders for their support in this journey," concluded Mr. Perron.
Consolidated Financial Highlights
Three months ended | February 29, | February 28, | Change | Change in constant | (1) | ||
(In thousands of Canadian dollars, except % and per share data) (unaudited) | $ | $ | % | % | |||
Revenue | 730,501 | 736,646 | (0.8) | (0.7) | |||
Adjusted EBITDA (1) | 347,112 | 351,215 | (1.2) | (1.0) | |||
Adjusted EBITDA margin (1) | 47.5 % | 47.7 % | |||||
Profit for the period | 96,562 | 104,262 | (7.4) | ||||
Profit for the period attributable to owners of the Corporation | 93,681 | 98,378 | (4.8) | ||||
Adjusted profit attributable to owners of the Corporation (1)(3) | 94,054 | 103,488 | (9.1) | ||||
Cash flows from operating activities | 285,434 | 203,043 | 40.6 | ||||
Free cash flow (1) | 100,155 | 117,939 | (15.1) | (15.4) | |||
Free cash flow, excluding network expansion projects (1) | 124,545 | 160,181 | (22.2) | (22.5) | |||
Acquisition of property, plant and equipment | 180,247 | 172,967 | 4.2 | ||||
Net capital expenditures (1)(2) | 170,769 | 156,125 | 9.4 | 9.8 | |||
Net capital expenditures, excluding network expansion projects (1) | 146,379 | 113,883 | 28.5 | 29.0 | |||
Capital intensity (1) | 23.4 % | 21.2 % | |||||
Capital intensity, excluding network expansion projects (1) | 20.0 % | 15.5 % | |||||
Diluted earnings per share | 2.20 | 2.19 | 0.5 | ||||
Adjusted diluted earnings per share (1)(3) | 2.21 | 2.31 | (4.3) | ||||
Operating results
For the second quarter of fiscal 2024 ended on February 29, 2024:
- Revenue decreased by 0.8% to $730.5 million. On a constant currency basis(1), revenue decreased by 0.7% due to revenue growth in the Canadian telecommunications segment being offset by a decline in the American telecommunications segment, as explained below.
- Canadian telecommunications' revenue increased by 1.4%, mainly driven by the oxio acquisition completed on March 3, 2023 as well as the cumulative effect of high-speed Internet service additions over the past year.
- American telecommunications' revenue decreased by 3.1%, or 2.8% in constant currency, mainly due to lower video subscriptions and a lower customer base over the past year, with an increasing proportion of customers only subscribing to Internet services, partly offset by higher revenue per customer and a better product mix resulting from customers subscribing to increasingly fast Internet speeds.
- Adjusted EBITDA decreased by 1.2% to $347.1 million. On a constant currency basis, adjusted EBITDA decreased by 1.0%, mainly due to higher corporate costs, primarily due to the timing of certain operating expenses, including in relation to its plan to offer mobile services in Canada, while adjusted EBITDA remained stable in both the Canadian and American telecommunications segments, as explained below.
- Canadian telecommunications adjusted EBITDA remained stable mainly due to revenue growth being offset by higher sales and other operating expenses to drive and support customer growth.
- American telecommunications adjusted EBITDA remained stable mostly due to a better product mix of higher margin services and lower operating expenses driven by cost reduction initiatives and operating efficiencies, partially offset by a lower customer base.
- Profit for the period amounted to $96.6 million, of which $93.7 million, or $2.20 per diluted share, was attributable to owners of the Corporation compared to $104.3 million, $98.4 million, and $2.19 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 financial expense, and lower adjusted EBITDA, partly offset by lower income tax expense and acquisition, integration, restructuring and other costs.
- Adjusted profit attributable to owners of the Corporation(3) was $94.1 million, or $2.21 per diluted share(3), compared to $103.5 million, or $2.31 per diluted share, last year.
- Net capital expenditures were $170.8 million, an increase of 9.4% compared to $156.1 million in the same period of the prior year. In constant currency, net capital expenditures(1) were $171.4 million, an increase of 9.8% compared to last year, mainly due to higher costs in relation to customer premise equipment in the Canadian telecommunications segment, partly offset by lower spending in the American telecommunications segment, mainly due to the timing of network expansion projects.
- Excluding network expansion projects, net capital expenditures were $146.4 million, an increase of 28.5% compared to $113.9 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects(1) were $147.0 million, an increase of 29.0% compared to last year.
- Fibre-to-the-home network expansion projects continued in both Canada and the United States, with homes passed additions of more than 32,000 during the first six months of fiscal 2024.
- Capital intensity was 23.4% compared to 21.2% last year. Excluding network expansion projects, capital intensity was 20.0% compared to 15.5% in the same period of the prior year.
- Acquisition of property, plant and equipment increased by 4.2% to $180.2 million, mainly due to higher costs in the Canadian telecommunications segment, partly offset by lower spending in the American telecommunications segment.
- Free cash flow decreased by 15.1%, or 15.4% in constant currency, and amounted to $100.2 million, or $99.8 million in constant currency, mainly due to higher net capital expenditures. Free cash flow, excluding network expansion projects decreased by 22.2%, or 22.5% in constant currency, and amounted to $124.5 million, or $124.2 million in constant currency.
- Cash flows from operating activities increased by 40.6% to $285.4 million, resulting mostly from the timing of trade and other payables and trade accounts receivable, lower income taxes paid and acquisition, integration, restructuring and other costs, offset in part by higher interest paid and lower adjusted EBITDA.
- Cogeco Communications maintains its fiscal 2024 financial guidelines as issued on November 1, 2023.
- At its April 11, 2024 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 in the comparable quarter of fiscal 2023.
(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 and adjusted diluted earnings per share are non-IFRS ratios. These indicated terms do not have standardized definitions prescribed by International Financial Reporting Standards ("IFRS") and, therefore, may not be comparable to similar measures presented by other companies. For more information on these financial measures, please consult the "Non-IFRS and other financial measures" section of this press release. |
(2) | Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases of spectrum licences, and 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. |
Financial highlights
Three and six months ended | February 29, | February 28, | Change | Change in constant | (1) | February 29, | February 28, | Change | Change in constant | (1) |
(In thousands of Canadian dollars, except % and per share data) | $ | $ | % | % | $ | $ | % | % | ||
Operations | ||||||||||
Revenue | 730,501 | 736,646 | (0.8) | (0.7) | 1,478,190 | 1,498,946 | (1.4) | (1.6) | ||
Adjusted EBITDA (2) | 347,112 | 351,215 | (1.2) | (1.0) | 706,072 | 718,438 | (1.7) | (1.9) | ||
Adjusted EBITDA margin (2) | 47.5 % | 47.7 % | 47.8 % | 47.9 % | ||||||
Acquisition, integration, restructuring and other costs (3) | 885 | 6,952 | (87.3) | 3,501 | 9,629 | (63.6) | ||||
Profit for the period | 96,562 | 104,262 | (7.4) | 192,314 | 224,637 | (14.4) | ||||
Profit for the period attributable to owners of the Corporation | 93,681 | 98,378 | (4.8) | 183,174 | 209,882 | (12.7) | ||||
Adjusted profit attributable to owners of the Corporation (2)(4) | 94,054 | 103,488 | (9.1) | 197,780 | 216,959 | (8.8) | ||||
Cash flow | ||||||||||
Cash flows from operating activities | 285,434 | 203,043 | 40.6 | 522,416 | 397,202 | 31.5 | ||||
Free cash flow (2) | 100,155 | 117,939 | (15.1) | (15.4) | 237,748 | 223,067 | 6.6 | 6.3 | ||
Free cash flow, excluding network expansion projects (2) | 124,545 | 160,181 | (22.2) | (22.5) | 293,798 | 331,143 | (11.3) | (11.5) | ||
Acquisition of property, plant and equipment | 180,247 | 172,967 | 4.2 | 333,796 | 407,604 | (18.1) | ||||
Net capital expenditures (2)(5) | 170,769 | 156,125 | 9.4 | 9.8 | 317,196 | 353,096 | (10.2) | (10.3) | ||
Net capital expenditures, excluding network expansion projects (2) | 146,379 | 113,883 | 28.5 | 29.0 | 261,146 | 245,020 | 6.6 | 6.5 | ||
Capital intensity (2) | 23.4 % | 21.2 % | 21.5 % | 23.6 % | ||||||
Capital intensity, excluding network expansion projects (2) | 20.0 % | 15.5 % | 17.7 % | 16.3 % | ||||||
Per share data (6) | ||||||||||
Earnings per share | ||||||||||
Basic | 2.21 | 2.21 | — | 4.23 | 4.66 | (9.2) | ||||
Diluted | 2.20 | 2.19 | 0.5 | 4.21 | 4.64 | (9.3) | ||||
Adjusted diluted (2)(4) | 2.21 | 2.31 | (4.3) | 4.55 | 4.79 | (5.0) | ||||
Dividends per share | 0.854 | 0.776 | 10.1 | 1.708 | 1.552 | 10.1 | ||||
(1) | Key performance indicators presented on a constant currency basis are obtained by translating financial results from the current period denominated in US dollars at the foreign exchange rate of the comparable period of the prior year. For the three and six-month periods ended February 28, 2023, the average foreign exchange rates used for translation were 1.3488 USD/CDN and 1.3489 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 and six-month periods ended February 29, 2024, acquisition, integration, restructuring and other costs mostly related to costs associated with the configuration and customization related to cloud computing and other arrangements, partly offset by a $4.2 million reversal of a charge, recognized during the second quarter following the Copyright Board decision issued in January 2024 on the redetermination of the 2014-2018 royalty rates. For the three and six-month periods ended February 28, 2023, acquisition, integration, restructuring and other costs resulted mostly from a $5.1 million retroactive adjustment recognized during the second quarter following the Copyright Board preliminary conclusions on the redetermination of the 2014-2018 royalty rates. |
(4) | Excludes the impact of acquisition, integration, restructuring and other costs, and gains/losses on debt modification and/or extinguishment, net of tax and non-controlling interest. |
(5) | Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance. |
(6) | Per multiple and subordinate voting share. |
As at | February 29, | August 31, |
(In thousands of Canadian dollars) | $ | $ |
Financial condition | ||
Cash and cash equivalents | 81,190 | 362,921 |
Total assets | 9,614,606 | 9,768,370 |
Long-term debt | ||
Current | 70,948 | 41,765 |
Non-current | 4,833,884 | 4,979,241 |
Net indebtedness (1) | 4,909,734 | 4,749,214 |
Equity attributable to owners of the Corporation | 2,937,011 | 2,957,797 |
(1) | Net indebtedness is a capital management measure. For more information on this financial measure, please consult the "Non-IFRS and other financial measures" section of the Corporation's MD&A for the three and six-month periods ended February 29, 2024, available on SEDAR+ at www.sedarplus.ca. |
Forward-looking statements
Certain statements contained in this press release may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Cogeco 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 strategies" section of the Corporation's 2023 annual MD&A and of the fiscal 2024 second-quarter MD&A, and the "Fiscal 2024 financial guidelines" section of the Corporation's 2023 annual MD&A for a discussion of certain key economic, market and operational assumptions we have made in preparing forward-looking statements. While management considers these assumptions to be reasonable based on information currently available to the Corporation, they may prove to be incorrect. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what Cogeco Communications currently expects. These factors include risks such as general market conditions, competitive risks (including changing competitive ecosystems and disruptive competitive strategies adopted by our competitors), business risks, regulatory risks, technology risks (including cybersecurity), financial risks (including variations in currency and interest rates), economic conditions (including inflation pressuring revenue, reduced consumer spending and increasing costs), talent management risks (including highly competitive market for limited pool of digitally skilled employees), human-caused and natural threats to the Corporation's network (including increased frequency of extreme weather events with the potential to disrupt operations), infrastructure and systems, community acceptance risks, ethical behavior risks, ownership risks, litigation risks and public health and safety, many of which are beyond the Corporation's control. For more exhaustive information on these risks and uncertainties, the reader should refer to the "Uncertainties and main risk factors" section of the Corporation's 2023 annual MD&A and of the fiscal 2024 second-quarter 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 Corporation's MD&A for the three and six-month periods ended February 29, 2024, the Corporation's condensed interim consolidated financial statements and the notes thereto for the same periods prepared in accordance with International Financial Reporting Standards ("IFRS") and the Corporation's 2023 Annual Report.
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 three and six-month periods ended February 29, 2024, 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 |
Financial measures presented on a constant currency basis for the three and six-month periods ended February 29, 2024 are translated at the average foreign exchange rate of the comparable periods of the prior year, which were 1.3488 USD/CDN and 1.3489 USD/CDN, respectively.
Constant currency basis and foreign exchange impact reconciliation
Consolidated
Three months ended | February 29, 2024 | February 28, 2023 | Change | |||||||||
(In thousands of Canadian dollars, except | Actual | Foreign | In constant | Actual | Actual | In constant | ||||||
$ | $ | $ | $ | % | % | |||||||
Revenue | 730,501 | 971 | 731,472 | 736,646 | (0.8) | (0.7) | ||||||
Operating expenses | 378,151 | 554 | 378,705 | 380,031 | (0.5) | (0.3) | ||||||
Management fees – Cogeco Inc. | 5,238 | — | 5,238 | 5,400 | (3.0) | (3.0) | ||||||
Adjusted EBITDA | 347,112 | 417 | 347,529 | 351,215 | (1.2) | (1.0) | ||||||
Free cash flow | 100,155 | (344) | 99,811 | 117,939 | (15.1) | (15.4) | ||||||
Net capital expenditures | 170,769 | 596 | 171,365 | 156,125 | 9.4 | 9.8 | ||||||
Six months ended | February 29, 2024 | February 28, 2023 | Change | |||||||||
(In thousands of Canadian dollars, | Actual | Foreign | In constant | Actual | Actual | In constant | ||||||
$ | $ | $ | $ | % | % | |||||||
Revenue | 1,478,190 | (3,491) | 1,474,699 | 1,498,946 | (1.4) | (1.6) | ||||||
Operating expenses | 761,642 | (1,953) | 759,689 | 769,708 | (1.0) | (1.3) | ||||||
Management fees – Cogeco Inc. | 10,476 | — | 10,476 | 10,800 | (3.0) | (3.0) | ||||||
Adjusted EBITDA | 706,072 | (1,538) | 704,534 | 718,438 | (1.7) | (1.9) | ||||||
Free cash flow | 237,748 | (520) | 237,228 | 223,067 | 6.6 | 6.3 | ||||||
Net capital expenditures | 317,196 | (464) | 316,732 | 353,096 | (10.2) | (10.3) | ||||||
Canadian telecommunications segment
Three months ended | February 29, 2024 | February 28, 2023 | Change | |||||||||
(In thousands of Canadian dollars, except | Actual | Foreign | In constant | Actual | Actual | In constant | ||||||
$ | $ | $ | $ | % | % | |||||||
Revenue | 373,479 | — | 373,479 | 368,334 | 1.4 | 1.4 | ||||||
Operating expenses | 174,720 | 63 | 174,783 | 170,289 | 2.6 | 2.6 | ||||||
Adjusted EBITDA | 198,759 | (63) | 198,696 | 198,045 | 0.4 | 0.3 | ||||||
Net capital expenditures | 106,345 | 428 | 106,773 | 81,383 | 30.7 | 31.2 | ||||||
Six months ended | February 29, 2024 | February 28, 2023 | Change | |||||||||
(In thousands of Canadian dollars, except | Actual | Foreign | In constant | Actual | Actual | In constant | ||||||
$ | $ | $ | $ | % | % | |||||||
Revenue | 749,927 | — | 749,927 | 740,418 | 1.3 | 1.3 | ||||||
Operating expenses | 354,814 | (128) | 354,686 | 343,740 | 3.2 | 3.2 | ||||||
Adjusted EBITDA | 395,113 | 128 | 395,241 | 396,678 | (0.4) | (0.4) | ||||||
Net capital expenditures | 194,181 | 40 | 194,221 | 196,621 | (1.2) | (1.2) | ||||||
American telecommunications segment
Three months ended | February 29, 2024 | February 28, 2023 | Change | |||||||||
(In thousands of Canadian dollars, except | Actual | Foreign | In constant | Actual | Actual | In constant | ||||||
$ | $ | $ | $ | % | % | |||||||
Revenue | 357,022 | 971 | 357,993 | 368,312 | (3.1) | (2.8) | ||||||
Operating expenses | 190,672 | 487 | 191,159 | 202,254 | (5.7) | (5.5) | ||||||
Adjusted EBITDA | 166,350 | 484 | 166,834 | 166,058 | 0.2 | 0.5 | ||||||
Net capital expenditures | 62,855 | 167 | 63,022 | 73,091 | (14.0) | (13.8) | ||||||
Six months ended | February 29, 2024 | February 28, 2023 | Change | |||||||||
(In thousands of Canadian dollars, except | Actual | Foreign | In constant | Actual | Actual | In constant | ||||||
$ | $ | $ | $ | % | % | |||||||
Revenue | 728,263 | (3,491) | 724,772 | 758,528 | (4.0) | (4.5) | ||||||
Operating expenses | 383,743 | (1,829) | 381,914 | 409,964 | (6.4) | (6.8) | ||||||
Adjusted EBITDA | 344,520 | (1,662) | 342,858 | 348,564 | (1.2) | (1.6) | ||||||
Net capital expenditures | 118,708 | (505) | 118,203 | 153,499 | (22.7) | (23.0) | ||||||
Adjusted profit attributable to owners of the Corporation
Three months ended | Six months ended | |||
February 29, | February 28, | February 29, | February 28, | |
(In thousands of Canadian dollars) | $ | $ | $ | $ |
Profit for the period attributable to owners of the Corporation | 93,681 | 98,378 | 183,174 | 209,882 |
Acquisition, integration, restructuring and other costs | 885 | 6,952 | 3,501 | 9,629 |
Loss on debt extinguishment (1) | — | — | 16,880 | — |
Tax impact for the above items | (219) | (1,842) | (5,380) | (2,552) |
Non-controlling interest impact for the above items | (293) | — | (395) | — |
Adjusted profit attributable to owners of the Corporation | 94,054 | 103,488 | 197,780 | 216,959 |
(1) | Included within financial expense. |
Free cash flow reconciliation
Three months ended | Six months ended | |||
February 29, | February 28, | February 29, | February 28, | |
(In thousands of Canadian dollars) | $ | $ | $ | $ |
Cash flows from operating activities | 285,434 | 203,043 | 522,416 | 397,202 |
Changes in other non-cash operating activities | 2,253 | 69,619 | 55,188 | 134,035 |
Income taxes paid (received) | (7,628) | 22,860 | (4,725) | 69,478 |
Current income taxes | (9,189) | (12,039) | (16,417) | (20,415) |
Interest paid | 68,288 | 50,326 | 132,260 | 110,824 |
Financial expense | (68,163) | (61,116) | (151,457) | (118,035) |
Loss on debt extinguishment (1) | — | — | 16,880 | — |
Amortization of deferred transaction costs and discounts on long-term debt (1) | 2,007 | 3,028 | 4,681 | 6,072 |
Net capital expenditures (2) | (170,769) | (156,125) | (317,196) | (353,096) |
Repayment of lease liabilities | (2,078) | (1,657) | (3,882) | (2,998) |
Free cash flow | 100,155 | 117,939 | 237,748 | 223,067 |
(1) | Included within financial expense. |
(2) | Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases 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 | Six months ended | |||
February 29, | February 28, | February 29, | February 28, | |
(In thousands of Canadian dollars) | $ | $ | $ | $ |
Acquisition of property, plant and equipment | 180,247 | 172,967 | 333,796 | 407,604 |
Subsidies received in advance recognized as a reduction of the cost of | (9,478) | (16,842) | (16,600) | (54,508) |
Net capital expenditures | 170,769 | 156,125 | 317,196 | 353,096 |
Adjusted EBITDA reconciliation
Three months ended | Six months ended | |||
February 29, | February 28, | February 29, | February 28, | |
(In thousands of Canadian dollars) | $ | $ | $ | $ |
Profit for the period | 96,562 | 104,262 | 192,314 | 224,637 |
Income taxes | 17,820 | 24,693 | 35,918 | 56,646 |
Financial expense | 68,163 | 61,116 | 151,457 | 118,035 |
Depreciation and amortization | 163,682 | 154,192 | 322,882 | 309,491 |
Acquisition, integration, restructuring and other costs | 885 | 6,952 | 3,501 | 9,629 |
Adjusted EBITDA | 347,112 | 351,215 | 706,072 | 718,438 |
Net capital expenditures and free cash flow excluding network expansion projects reconciliations
Net capital expenditures
Three months ended | February 29, 2024 | February 28, 2023 | Change | ||||||||
(In thousands of Canadian dollars, except | Actual | Foreign | In constant | Actual | Actual | In constant | |||||
$ | $ | $ | $ | % | % | ||||||
Net capital expenditures | 170,769 | 596 | 171,365 | 156,125 | 9.4 | 9.8 | |||||
Net capital expenditures in connection | 24,390 | 11 | 24,401 | 42,242 | (42.3) | (42.2) | |||||
Net capital expenditures, excluding | 146,379 | 585 | 146,964 | 113,883 | 28.5 | 29.0 | |||||
Six months ended | February 29, 2024 | February 28, 2023 | Change | ||||||||
(In thousands of Canadian dollars, except | Actual | Foreign | In constant | Actual | Actual | In constant | |||||
$ | $ | $ | $ | % | % | ||||||
Net capital expenditures | 317,196 | (464) | 316,732 | 353,096 | (10.2) | (10.3) | |||||
Net capital expenditures in connection | 56,050 | (151) | 55,899 | 108,076 | (48.1) | (48.3) | |||||
Net capital expenditures, excluding | 261,146 | (313) | 260,833 | 245,020 | 6.6 | 6.5 | |||||
Free cash flow
Three months ended | February 29, 2024 | February 28, 2023 | Change | ||||||||
(In thousands of Canadian dollars, except | Actual | Foreign | In constant | Actual | Actual | In constant | |||||
$ | $ | $ | $ | % | % | ||||||
Free cash flow | 100,155 | (344) | 99,811 | 117,939 | (15.1) | (15.4) | |||||
Net capital expenditures in connection | 24,390 | 11 | 24,401 | 42,242 | (42.3) | (42.2) | |||||
Free cash flow, excluding | 124,545 | (333) | 124,212 | 160,181 | (22.2) | (22.5) | |||||
Six months ended | February 29, 2024 | February 28, 2023 | Change | ||||||||
(In thousands of Canadian dollars, except | Actual | Foreign | In constant | Actual | Actual | In constant | |||||
$ | $ | $ | $ | % | % | ||||||
Free cash flow | 237,748 | (520) | 237,228 | 223,067 | 6.6 | 6.3 | |||||
Net capital expenditures in connection | 56,050 | (151) | 55,899 | 108,076 | (48.1) | (48.3) | |||||
Free cash flow, excluding network | 293,798 | (671) | 293,127 | 331,143 | (11.3) | (11.5) | |||||
Additional information relating to the Corporation is available on SEDAR+ at www.sedarplus.ca and on the Corporation's website at corpo.cogeco.com.
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
Troy Crandall
Head, Investor Relations
Cogeco Communications Inc.
Tel.: 514-764-4600
troy.crandall@cogeco.com
Media
Youann Blouin
Director, Media Relations & Strategic Communications
Cogeco Communications Inc.
Tel.: 514-297-2853
youann.blouin@cogeco.com
Conference Call: | Friday, April 12th, 2024 at 11:00 a.m. (Eastern Daylight Time) |
A live audio of the analyst conference call will be available on both the Investor Relations and the Events and Presentations pages on Cogeco 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.
