Today, COGECO Inc. (TSX:CGO) ("COGECO" or the "Corporation") announced its
financial results for the fourth quarter and fiscal year 2013, ended August 31,
2013, in accordance with International Financial Reporting Standards ("IFRS").
For the fourth quarter and fiscal 2013, which include nine months operating
results of Atlantic Broadband and seven months operating results of PEER 1:
-- Fourth quarter revenue increased by 41.5% to reach $504.7 million and by
30.4% for fiscal 2013 to close at $1.8 billion when compared to the same
periods of the prior year;
-- Operating income before depreciation and amortization(1) increased by
37.1% to $224.3 million compared to the fourth quarter of fiscal 2012,
and by 31.4% to $797.4 million compared to the prior year. Operating
income before depreciation and amortization increases for both periods
are mainly from the Cable segment and attributable to the acquisitions
of Atlantic Broadband and PEER 1 (the "recent acquisitions") as well as
to the financial results improvement from organic growth;
(1) The 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 details, please consult the "Non-IFRS financial measures"
section of the Management's discussion and analysis ("MD&A")
-- Profit for the period from continuing operations amounted to $43.8
million in the fourth quarter compared to $44.9 million for the same
period of the previous fiscal year. The decrease is mostly attributable
to additional depreciation and amortization and financial expense both
related to the recent acquisitions. It is partly offset by the operating
income before depreciation and amortization improvement stemming from
the Cable segment organic growth, the recent acquisitions combined with
lower income tax expenses resulting from the recent acquisitions tax
structure. For fiscal 2013, profit for the year from continuing
operations amounted to $189.8 million compared to $174.2 million for
fiscal 2012. Profit progression is mostly attributable to the
improvement in the operating income before depreciation and amortization
generated by the Cable segment, partly offset by additional depreciation
and amortization, financial expense and acquisition costs all related to
the recent acquisitions;
-- Profit for the period amounted to $43.8 million in the fourth quarter
when compared to $44.9 million for the same period of the previous
fiscal year due to the factors previously described. For the year ended
August 31, 2013, profit for the year amounted to $189.8 million when
compared to $229.7 million for the same period of fiscal 2012. The
decline for the year is attributable to the factors previously described
and also due to last year's profit of $55.4 million from the sale of the
Portuguese subsidiary, Cabovisao - Televisao por Cabo, S.A.
("Cabovisao"), reported as discontinued operations in fiscal 2012;
-- Free cash flow(1) reached $53.7 million for the fourth quarter compared
to negative free cash flow of $5.0 million in the comparable quarter of
the prior year. The increase for the period is mostly attributable to
the improvement of operating income before depreciation and amortization
as well as to the decrease in acquisition of property, plant and
equipment and current income taxes, partly offset by the increase in
financial expense. Fiscal 2013 free cash flow amounted to
$151.7 million compared to $68.7 million in fiscal 2012. The increase
for the year is mostly attributable to the improvement of operating
income before depreciation and amortization and the decrease in current
income taxes, partly offset by the increase in financial expense, the
recent acquisition costs and the increase in acquisition of property,
plant and equipment;
(1) The indicated terms do not have standard definitions prescribed by IFRS
and, therefore, may not be comparable to similar measures presented by
other companies. For more details, please consult the "Non-IFRS
financial measures" section of the MD&A.
-- A quarterly dividend of $0.19 per share was paid to the holders of
subordinate and multiple voting shares, an increase of $0.01 per share,
or 5.6%, compared to a dividend of $0.18 per share paid in the fourth
quarter of fiscal 2012. Dividends paid in fiscal 2013 totaled $0.76 per
share compared to $0.72 per share in fiscal 2012;
-- Cable segment fourth-quarter 2013 primary service units ("PSU")(2)
decreased by 15,237 and increased by 5,546 for fiscal 2013. At August
31, 2013, consolidated PSU amounted to 2,465,780 of which 1,980,122 come
from the Canadian operations and 485,658 from the American operations;
(2) Represents the sum of Television, High Speed Internet ("HSI") and
Telephony service customers.
-- On October 30, 2013, COGECO declared an eligible dividend of $0.22 per
share, an increase of 15.8% when compared to the $0.19 dividend per
share paid in the fourth quarter of fiscal 2013;
-- On June 27, 2013, the Corporation's subsidiary, Cogeco Cable, completed,
pursuant to a private placement, the issuance of US$215 million Senior
Secured Notes bearing interest at 4.30% payable semi-annually and
maturing on June 16, 2025. The net proceeds from this offering along
with drawings under Cogeco Cable's credit facilities were used to repay,
on July 29, 2013, all the outstanding amount of $300 million Senior
Secured Debentures Series 1, due on June 9, 2014;
-- On July 22, 2013, Cogeco Cable entered into interest rate swap
agreements to fix the interest rate on US$200 million of its LIBOR based
loans. These agreements have the effect of converting the floating US
LIBOR base rate at an average fixed rate of 0.39625% under its Term
Revolving Facility until July 25, 2015; and
-- On July 5, 2013, Cogeco Cable reduced its Term Revolving Facility from
$750 million to $600 million and its Revolving Facility of its Secured
Credit Facilities from $240 million to $190 million.
"Fiscal 2013 proved to be a strong financial year for COGECO and its
subsidiaries, during which good headway was made in positioning the business
toward sustained profitable growth," stated Louis Audet, President & Chief
Executive Officer of COGECO Inc.
"Our Cogeco Cable subsidiary completed two acquisitions that allowed the
Corporation, on the one hand, to diversify its cable assets geographically and,
on the other hand, build a stronger footprint in the promising data hosting and
managed IT services market. As a logical aftermath to its evolving portfolio,
Cogeco Cable regrouped its Canadian cable operations under a self- standing
operational unit, a move that will better facilitate continued excellence in
product innovation and customer service to the benefit of its Canadian Digital
Television, Telephony and HSI customers. All of this, along with the successful
refinancing that was completed during a period of low interest rates, should
enhance Cogeco Cable's financial performance in fiscal 2014," continued Mr.
Audet.
"Our Cogeco Diffusion subsidiary also fared well in fiscal 2013, having
completed the full integration of Cogeco Metromedia. Today, we have the largest
commercial talk radio network in the province of Quebec, attracting listeners
who represent families among those with the highest per capita income profile
very much sought after by advertisers. I am very pleased with our overall
results and am optimistic about our ability to deliver on our 2014 projections
with a steady performance our investors can count on," concluded Louis Audet.
Fiscal 2014 Financial Guidelines
COGECO revised its fiscal 2014 financial guidelines, as issued on July 10, 2013,
as a result of certain adjustments related to the preliminary allocation of the
purchase price of Atlantic Broadband and PEER 1 in the Cable segment. Please
consult the "Fiscal 2014 financial guidelines" section of the Corporation's 2013
Annual Report for further details.
FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Quarters ended Years ended
(in thousands of
dollars, except
PSU growth,
percentages and August August
per share data) 31, 31, August 31, August 31,
2013 2012 Change 2013 2012 Change
$ $ % $ $ %
----------------------------------------------------------------------------
Operations
Revenue 504,714 356,685 41.5 1,834,257 1,406,353 30.4
Operating income
before
depreciation
and
amortization(1) 224,304 163,617 37.1 797,426 606,842 31.4
Operating income 104,110 95,943 8.5 387,489 324,989 19.2
Profit for the
period from
continuing
operations 43,759 44,900 (2.5) 189,777 174,246 8.9
Profit for the
period from
discontinued
operations - - - - 55,446 -
Profit for the
period 43,759 44,900 (2.5) 189,777 229,692 (17.4)
Profit for the
period
attributable to
owners of the
Corporation 13,826 13,889 (0.5) 64,088 77,051 (16.8)
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Cash Flow
Cash flow from
operating
activities 233,464 203,193 14.9 552,195 448,764 23.0
Cash flow from
operations(1) 162,427 119,612 35.8 563,091 447,110 25.9
Acquisitions of
property, plant
and equipment,
intangible and
other assets(2) 108,756 124,638 (12.7) 411,422 378,369 8.7
Free cash
flow(1) 53,671 (5,026) - 151,669 68,741 -
----------------------------------------------------------------------------
Financial
Condition
Property, plant
and equipment - - - 1,874,866 1,343,904 39.5
Total assets - - - 5,452,513 3,103,919 75.7
Indebtedness(3) - - - 3,054,275 1,180,971 -
Equity
attributable to
owners of the
Corporation - - - 457,285 397,799 15.0
----------------------------------------------------------------------------
Primary service
units ("PSU")
growth
(decline)(4) (15,237) 7,564 - 5,546 73,645 (92.5)
----------------------------------------------------------------------------
Per Share
Data(5)
Earnings per
share
attributable to
owners of the
Corporation
From
continuing
and
discontinued
operations
Basic 0.83 0.83 - 3.83 4.61 (16.9)
Diluted 0.82 0.83 (1.2) 3.81 4.58 (16.8)
From
continuing
operations
Basic 0.83 0.83 - 3.83 3.54 8.2
Diluted 0.82 0.83 (1.2) 3.81 3.52 8.2
From
discontinued
operations
Basic - - - - 1.07 -
Diluted - - - - 1.06 -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The 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 details, please consult the
"Non-IFRS financial measures" section of the MD&A.
(2) Fiscal 2013 fourth-quarter and fiscal 2013 acquisitions of property,
plant and equipment, intangible and other assets include assets
acquired under finance lease of $0.9 million that are excluded from the
statements of cash flows.
(3) Indebtedness is defined as the aggregate of bank indebtedness,
principal on long-term debt, balance due on business combinations and
obligations under derivative financial instruments.
(4) Represents the sum of Television, High Speed Internet ("HSI") and
Telephony service customers.
(5) Per multiple and subordinate voting share.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release may constitute forward-looking
information within the meaning of securities laws. Forward-looking information
may relate to COGECO's 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. In particular, statements
regarding the Corporation's future operating results and economic performance
and its objectives and strategies are forward- looking statements. These
statements are based on certain factors and assumptions including expected
growth, results of operations, performance and business prospects and
opportunities, which COGECO believes are reasonable as of the current date.
While management considers these assumptions to be reasonable based on
information currently available to the Corporation, they may prove to be
incorrect. The Corporation cautions the reader that the economic downturn
experienced over the past few years makes forward-looking information and the
underlying assumptions subject to greater uncertainty and that, consequently,
they may not materialize, or the results may significantly differ from the
Corporation's expectations. It is impossible for COGECO to predict with
certainty the impact that the current economic uncertainties may have on future
results. Forward-looking information is also subject to certain factors,
including risks and uncertainties (described in the "Uncertainties and main risk
factors" section of the Corporation's 2013 annual Management's Discussion and
Analysis ("MD&A")) that could cause actual results to differ materially from
what COGECO currently expects. These factors include risks pertaining to markets
and competition, technology, regulatory developments, operating costs,
information systems, disasters or other contingencies, financial risks related
to capital requirements, human resources, controlling shareholder and holding
structure, many of which are beyond the Corporation's control. Therefore, future
events and results may vary significantly from what management currently
foresees. The reader should not place undue importance on forward-looking
information and should not rely upon this information as of any other date.
While management may elect to, the Corporation is under no obligation and does
not undertake to update or alter this information at any particular time, except
as may be 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 2013 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, 2013
ADDITIONAL INFORMATION
Additional information relating to the Corporation, including its Annual
Information Form, is available on the SEDAR website at www.sedar.com.
The Corporation's 2013 Annual Report can also be found on:
http://www.cogeco.ca/cable/corporate/cgo/investors/results_annual_2013.html
A copy of this press release with a more detailed summary of results can be
found at
http://www.cogeco.ca/cable/corporate/files/press_releases_en/2013/CGO_Q4-2013_detailed_103013.pdf
ABOUT COGECO
COGECO is a diversified holding corporation. Through its Cogeco Cable
subsidiary, COGECO provides to its residential and business customers Analogue
and Digital Television, High Speed Internet and Telephony services. Cogeco Cable
operates in Canada through its subsidiary Cogeco Cable Canada in Quebec and
Ontario, and in the United States through its subsidiary Atlantic Broadband in
Western Pennsylvania, South Florida, Maryland/Delaware and South Carolina.
Through its subsidiary Cogeco Enterprise Services, the holding company of Cogeco
Data Services and Peer 1 Network Enterprises, Cogeco Cable provides to its
commercial customers, a suite of IT hosting, information and communications
technology services (data centre, colocation, managed hosting, cloud
infrastructure and connectivity), with 20 data centres, extensive fibre networks
in Montreal and Toronto as well as points-of-presence in North America and
Europe. Through its subsidiary Cogeco Diffusion, COGECO owns and operates 13
radio stations across most of Quebec with complementary radio formats serving a
wide range of audiences as well as Cogeco News, its news agency. Through its
subsidiary Metromedia, COGECO operates an advertising representation house
specialized in the public transit sector that holds exclusive advertising rights
in the Province of Quebec where it also represents its business partners active
across other Canadian markets. COGECO's subordinate voting shares are listed on
the Toronto Stock Exchange (TSX:CGO). The subordinate voting shares of Cogeco
Cable are also listed on the Toronto Stock Exchange (TSX:CCA). For more
information about COGECO and its subsidiaries visit www.cogeco.ca,
cogecodiffusion.com and cogecometromedia.com.
Analyst Conference Thursday, October 31, 2013 at 11:00 a.m. (Eastern
Call: Daylight Time)
Media representatives may attend as listeners only.
Please use the following dial-in number to have access
to the conference call by dialing five minutes before
the start of the conference:
Canada/United States Access Number: 1 866-321-6651
International Access Number: + 1 416-642-5212
Confirmation Code: 7376711
By Internet at www.cogeco.ca/investors
A rebroadcast of the conference call will be available
until November 7, 2013, by dialing:
Canada and United States access number: 1 888-203-1112
International access number: + 1 647-436-0148
Confirmation code: 7376711
FOR FURTHER INFORMATION PLEASE CONTACT:
Source:
COGECO Inc.
Pierre Gagne
Senior Vice President and Chief Financial Officer
514-764-4700
Information:
Media
Rene Guimond
Vice-President, Public Affairs and Communications
514-764-4700
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