Earlier this week, COGECO Inc. announced its financial results for the second quarter of fiscal 2013, ended February 28, 2013, in accordance with International Financial Reporting Standards (“IFRS”).
For the second quarter and first six months of fiscal 2013, which include three month operating results of Atlantic Broadband (“ABB”) and one month for Peer 1 Network Enterprises, Inc. (“PEER 1”):
- Revenue increased by 32.7% to reach $458.5 million, and by 19.3% to reach $825.1 million;
- Operating income before depreciation and amortization increased by 35.6% to $196.0 million when compared to the second quarter of fiscal 2012, and by 23.8% to $352.5 million when compared to the first half of the prior year;
- Profit for the period from continuing operations amounted to $56.5 million in the second quarter when compared to $29.4 million for the same period of the previous fiscal year. Profit progression for the quarter is mostly attributable to the operating income before depreciation and amortization increase coming primarily from the acquisitions, in the Cable segment, of ABB and PEER 1, partly offset by the acquisition costs and the financial expense increases both related to ABB and PEER 1. For the first half of fiscal 2013, profit for the period from continuing operations amounted to $103.6 million when compared to $74.0 million for the first half of fiscal 2012. The increase for the six-month period ended February 28, 2013 is mostly attributable to the increase in operating income before depreciation and amortization coming primarily from the acquisition of ABB, partly offset by the acquisition costs and the financial expense increases both related to ABB and PEER 1 and income tax expense increase;
- Profit for the period amounted to $56.5 million in the second quarter when compared to $81.5 million for the same period of the previous fiscal year. For the first half of fiscal 2013, profit for the period amounted to $103.6 million when compared to $129.4 million for the comparable period of prior year. The decline for both periods is mostly attributable to the last year’s profit from the Portuguese subsidiary, Cabovisão – Televisão por Cabo, S.A. (“Cabovisão”), reported as discontinued operations and disposed of on February 29, 2012, partly offset by the increases of operating income before depreciation and amortization, financial expense and acquisition costs all related to ABB and PEER 1 and the income tax expense increase;
- Free cash flow(1) reached $34.4 million for the second quarter compared to $18.0 million in the comparable quarter of the prior year. For the six months, free cash flow amounted to $53.0 million, compared to $44.3 million in the first half of fiscal 2012. The increases in free cash flow over the prior year are due to the improvement of operating income before depreciation and amortization, partly offset by the increase in financial expense, the acquisition costs related to ABB and PEER 1 acquisitions as well as 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 Management’s discussion and analysis. |
- 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%, when compared to a dividend of $0.18 per share paid in the second quarter of fiscal 2012. Dividend payments in the first six months totaled $0.38 per share in fiscal 2013, compared to $0.36 per share in fiscal 2012;
- In the Cable segment, fiscal 2013 second-quarter primary service units (“PSU”)(1) grew by 7,463 and by 22,543 in the first six months of fiscal 2013. At February 28, 2013, consolidated PSU amounted to 2,486,350 of which 1,984,555 comes from the Canadian cable services segment and 501,795 from the American cable services segment;
- On January 31, 2013, Cogeco Cable completed the acquisition of 96.57% of the issued and outstanding shares of PEER 1 by way of takeover bid (the “offer”) valued at approximately $649 million. On April 3, 2013, Cogeco Cable completed the acquisition of the remaining 3.43% of the issued and outstanding shares of PEER 1 for a cash consideration of $17 million pursuant to the compulsory acquisition provisions in Section 300 of the Business Corporations Act (“British Columbia”). In connection with the completion of the offer, Cogeco Cable has entered into secured credit facilities in the amount of approximately $650 million and maturing in 2017, with a syndicate of lenders. PEER 1 is one of the world’s leading internet infrastructure providers, specializing in managed hosting, dedicated servers, cloud services and co-location. This acquisition enhances Cogeco Cable footprint and builds on its strategic initiatives by increasing scale in an attractive industry segment with significant growth prospects in the state of the art data center platforms. The Corporation will also serve additional businesses worldwide, in addition to approximately 11,000 customers currently served, through 23 data centres and 21 points-of-presence across North America and Europe. PEER 1’s primary network centre and head office remain located in Vancouver.
“We are satisfied with the favourable results obtained for the second quarter of fiscal 2013,” declared Louis Audet, President and Chief Executive Officer of Cogeco Inc. “The cable subsidiary continues along a path of steady growth, both organic and through acquisition. Results for ABB’s first quarter as a part of Cogeco Cable had been in line with expectations. I am confident in this subsidiary’s ongoing ability to perform and contribute favourably to Cogeco’s objectives,” continued Louis Audet.
“Regarding Cogeco Diffusion Inc., we are pleased with our radio business ratings confirming its leadership in the Montreal market and good performance in most of our other markets across the province of Quebec. Furthermore, our transit advertising business, Cogeco Métromédia, is delivering results according to plan,” concluded Louis Audet.
(1) | Represents the sum of Television, High Speed Internet (“HSI”) and Telephony service customers. |
SHAREHOLDERS’ REPORT
Three and six-month periods ended February 28, 2013
For the complete report, read the PDF.