- Revenue increased by 16.1% (19.0% in constant currency
(1)) compared to the same period of the prior year to
reach $718.5 million;
- Adjusted EBITDA (1) reached $349.3 million, an increase of 12.3% (14.9% in
constant currency (1)) compared to the same period of
the prior year;
- Profit for the period amounted to $116.6 million, an increase of 1.5%;
- Free cash flow (1) amounted to $132.1 million, a decrease of 6.0% (5.2% in
constant currency (1)) compared to the same period of
the prior year;
- Cash flows from operating activities increased by 18.7% to
reach $286.9 million; and
- Atlantic Broadband has announced it is changing its name to
Breezeline.
MONTRÉAL, Jan. 13, 2022 /CNW
Telbec/ - Today, Cogeco Communications Inc. (TSX: CCA)
("Cogeco Communications" or the "Corporation") announced its
financial results for the first quarter ended November 30,
2021, in accordance with International Financial Reporting
Standards ("IFRS").
OPERATING RESULTS
For the first quarter of fiscal 2022:
- Revenue increased by 16.1% to reach $718.5 million compared to the previous year. On
a constant currency basis, revenue increased by 19.0%, mainly
explained as follows:
-
- American broadband services revenue increased by 31.0% in
constant currency mostly resulting from the Ohio broadband systems acquisition completed
on September 1, 2021, and from a
higher Internet service customer base and a higher value product
mix.
- Canadian broadband services revenue increased by 8.2% mainly as
a result of the DERYtelecom acquisition completed on December 14, 2020.
- Adjusted EBITDA increased by 12.3% to reach $349.3 million compared to the previous year. On
a constant currency basis, adjusted EBITDA increased by 14.9%,
mainly explained as follows:
-
- American broadband services adjusted EBITDA increased by 33.0%
in constant currency mainly resulting from the impact of the
Ohio broadband systems acquisition
and a higher margin driven by the organic revenue growth, partly
offset by costs in connection with the rebranding of Atlantic
Broadband to Breezeline and overall higher marketing and
advertising activities and other costs which were unusually low
last year in the context of the COVID-19 pandemic restriction
- Canadian broadband services adjusted EBITDA increased by 0.7%
in constant currency mainly resulting from the impact of the
DERYtelecom acquisition, partly offset by higher marketing and
advertising activities and other costs which were unusually low
last year in the context of the COVID-19 pandemic restrictions.
- Profit for the period amounted to $116.6
million, of which $106.8
million, or $2.29 per share,
was attributable to owners of the Corporation compared to
$114.9 million, $106.7 million, and $2.24 per share, respectively, in the comparable
period of fiscal 2021. The increases resulted mainly from higher
adjusted EBITDA and lower income tax expense, partly offset by the
increases in depreciation and amortization expense, integration,
restructuring and acquisition costs and financial expense.
- Free cash flow decreased by 6.0% (5.2% in constant currency) to
reach $132.1 million compared to the
previous year, mainly as a result of higher capital expenditures,
and to a lesser extent, due to higher integration, restructuring
and acquisition costs resulting from the acquisition of the
Ohio broadband systems, and higher
financial expense, partly offset by higher adjusted EBITDA and
lower current income taxes.
- Cash flows from operating activities increased by 18.7% to
reach $286.9 million compared to the
previous year, mainly from higher adjusted EBITDA, improved working
capital elements, and lower income taxes paid, partly offset by
higher interest paid.
- Cogeco Communications purchased and cancelled 274,000
subordinate voting shares for a total consideration of $29.5 million.
- On September 1, 2021, Breezeline
(formerly Atlantic Broadband) completed the acquisition of the
Ohio broadband systems for a
purchase price of $1.418 billion
(US$1.125 billion), subject to
customary post-closing adjustments.
- Cogeco Communications maintains its fiscal 2022 financial
guidelines as issued on November 11,
2021.
- At its January 13, 2022 meeting,
the Board of Directors of Cogeco Communications declared a
quarterly eligible dividend of $0.705
per share compared to $0.64 per share
in the comparable quarter of fiscal 2021.
- On December 17, 2021, Cogeco
Communications amended and extended its $750
million Term Revolving Facility to January 24, 2027. As part of the amendments,
Cogeco Communications has transitioned its revolving facility into
a Sustainability-linked loan ("SLL") structure, underscoring its
strong leadership and dedication to sustainability and the
organization's Environmental, social and governance (ESG)
goals.
|
|
(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 this press release, including
reconciliation to the most comparable IFRS financial
measures.
|
"For this first quarter of fiscal 2022, we are satisfied with
Cogeco Communications' performance, which is in line with
expectations," declared Philippe Jetté, President and Chief
Executive Officer of Cogeco Communications Inc.
"Results for the first quarter at our Canadian broadband
business unit were in line with expectations," said Mr. Jetté.
"Over the past months, Cogeco Connexion has also made good progress
in its preparation for the deployment of its network expansion
projects in underserved and unserved areas in partnership with
governments."
"In the United States, our
broadband business unit had a good first quarter," continued Mr.
Jetté. "The integration of our recently acquired Ohio broadband systems is advancing well,
according to plan. The team is also progressing well with its major
fiber network expansion initiative. More recently, we announced a
full rebrand including a new name, Breezeline. The rebrand
represents a pledge to an every day customer experience which goes
above and beyond expectations."
"Finally, we were proud to recently publish our first Climate
Action Plan outlining the key steps the Corporation is taking in
support of urgent climate action, as well as our processes and
strategies to assess and manage climate-related risks and
opportunities. We are also very pleased to have been awarded the
prestigious "A" rating by the internationally recognized
organization CDP for our leadership in environmental transparency,"
concluded Mr. Jetté.
COVID-19 PANDEMIC
While the impact of the COVID-19 pandemic on the Corporation is
generally stabilizing, we remain cautious in our management of the
situation which can evolve quickly. Our priority remains on
ensuring the well-being of our employees, customers and business
partners.
The pandemic has generally highlighted the value of the services
we offer, especially our high-speed Internet services, as customers
have been spending more time at home for work, education and
entertainment purposes. During the first year of the pandemic we
have generally witnessed strong demand for either obtaining or
upgrading speeds of high-speed Internet, along with reduced
operating costs due to a stable customer base and not being able to
use all usual sales channels. However, operations have generally
been conducted in a normal fashion during the past two
quarters.
The pandemic has also accelerated the willingness of various
governments to provide high-speed Internet in underserved and
unserved areas. This has led to additional funding to partially pay
for network expansions in such areas. The Corporation has partnered
with governments in both Canada
and the United States in such
endeavor and expects to do more in the years to come.
The Corporation's results discussed herein may not be indicative
of future operational trends and financial performance. Please
refer to the "Forward-looking statements" section.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
On December 7, 2021, Cogeco
published its first Task Force on Climate Related Financial
Disclosures ("TCFD") report as part of its Climate Action Plan
which can be found on the corpo.cogeco.com website. On November 3, 2021, Cogeco announced that it was
one of 45 companies globally that received His Royal Highness The
Prince of Wales' Terra Carta Seal in
recognition of its commitment to creating a sustainable future.
This seal was awarded to companies whose ambitions are aligned with
those of the Terra Carta, a recovery plan for Nature, People and
Planet, launched in January 2021.
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
Three months ended
November 30,
|
|
|
2021
|
|
2020
|
|
Change
|
Change in
constant
currency
|
(1)
(2)
|
Foreign
exchange
impact
|
(1)
|
(In thousands of
Canadian dollars, except percentages and per share
data)
|
$
|
|
$
|
|
%
|
%
|
|
$
|
|
Operations
|
|
|
|
|
|
|
|
|
|
Revenue
|
718,541
|
|
618,913
|
|
16.1
|
19.0
|
|
(17,686)
|
|
Adjusted EBITDA
(2)
|
349,287
|
|
311,093
|
|
12.3
|
14.9
|
|
(8,032)
|
|
Adjusted EBITDA
margin (2)
|
48.6
|
%
|
50.3
|
%
|
|
|
|
|
|
Integration,
restructuring and acquisition costs (3)
|
18,635
|
|
1,215
|
|
—
|
|
|
|
|
Profit for the
period
|
116,610
|
|
114,896
|
|
1.5
|
|
|
|
|
Profit for the period
attributable to owners of the Corporation
|
106,837
|
|
106,679
|
|
0.1
|
|
|
|
|
Cash
flow
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
286,945
|
|
241,725
|
|
18.7
|
|
|
|
|
Acquisition of
property, plant and equipment (4)
|
141,028
|
|
116,222
|
|
21.3
|
25.2
|
|
(4,452)
|
|
Free cash flow
(2)
|
132,111
|
|
140,616
|
|
(6.0)
|
(5.2)
|
|
(1,191)
|
|
Capital intensity
(2)
|
19.6
|
%
|
18.8
|
%
|
|
|
|
|
|
Financial
condition (5)
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
408,985
|
|
365,520
|
|
11.9
|
|
|
|
|
Total
assets
|
8,931,252
|
|
7,351,692
|
|
21.5
|
|
|
|
|
Indebtedness (2)
(6)
|
4,757,919
|
|
3,319,708
|
|
43.3
|
|
|
|
|
Equity attributable
to owners of the Corporation
|
2,480,625
|
|
2,415,144
|
|
2.7
|
|
|
|
|
Per share data
(7)
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
Basic
|
2.29
|
|
2.24
|
|
2.2
|
|
|
|
|
Diluted
|
2.27
|
|
2.22
|
|
2.3
|
|
|
|
|
Dividends
|
0.705
|
|
0.64
|
|
10.2
|
|
|
|
|
(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-month period ended
November 30, 2020, the average foreign exchange rate used for
translation was 1.3170 USD/CDN.
|
(2)
|
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 this press release, including
reconciliation to the most comparable IFRS financial
measures.
|
(3)
|
For the three-month
period ended November 30, 2021, integration, restructuring and
acquisition costs resulted mostly from costs incurred in connection
with the acquisition, completed on September 1, 2021, and
ongoing integration of the Ohio broadband systems. For the
three-month period ended November 30, 2020, integration,
restructuring and acquisition costs resulted mostly from due
diligence costs and legal fees related to the acquisition of
DERYtelecom, which was completed on December 14, 2020.
|
(4)
|
For the three-month
period ended November 30, 2021, acquisition of property, plant
and equipment in constant currency amounted to $145.5
million.
|
(5)
|
At November 30,
2021 and August 31, 2021.
|
(6)
|
Indebtedness is
defined as the total of bank indebtedness and principal on
long-term debt.
|
(7)
|
Per multiple and
subordinate voting share.
|
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release may
constitute forward-looking information within the meaning of
securities laws. Forward-looking information may relate to 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 2022 financial
guidelines" sections of the Corporation's 2021 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, business risks (including potential disruption to our supply
chain), regulatory risks, technology risks (including cybersecurity
risk), financial risks (including variations in currency and
interest rates), economic conditions, human-caused and natural
threats to our network, infrastructure and systems, community
acceptance risks, ethical behavior risks, ownership risks,
litigation risks and public health crisis and emergencies such as
the current COVID-19 pandemic, 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" sections of the Corporation's
2021 Annual MD&A and of the current 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 Corporation's MD&A for the three-month period ended
November 30, 2021, the Corporation's
condensed interim consolidated financial statements and the notes
thereto for the same period prepared in accordance with
International Financial Reporting Standards ("IFRS") and the
Corporation's 2021 Annual Report.
NON-IFRS FINANCIAL MEASURES
This section describes non-IFRS financial measures used by
Cogeco Communications throughout this press release. These
financial measures are reviewed in assessing the performance of the
Corporation and used in the decision-making process with regard to
its business units. Reconciliations between "adjusted EBITDA",
"adjusted EBITDA margin", "free cash flow", "capital intensity",
"indebtedness" and "net indebtedness" and the most comparable IFRS
financial measures are also provided. These financial measures do
not have standard definitions prescribed by IFRS and therefore, may
not be comparable to similar measures presented by other
companies.
This press release also makes reference to key performance
indicators on a constant currency basis, including revenue,
"adjusted EBITDA", acquisition of property, plant and equipment and
"free cash flow". Measures on a constant currency basis are
considered non-IFRS financial measures and do not have any
standardized meaning prescribed by IFRS and therefore, may not be
comparable to similar measures presented by other companies.
|
|
|
|
Non-IFRS
financial
measures
|
Application
|
Calculation
|
Most
comparable
IFRS financial measures
|
Adjusted
EBITDA
and
adjusted EBITDA
margin
|
Adjusted EBITDA and
adjusted EBITDA margin are
key measures commonly reported and used in the
telecommunications industry, as they allow
comparisons between companies that have different
capital structures and are more current measures since
they exclude the impact of historical investments in
assets. Adjusted EBITDA is one of the key metrics
employed by the financial community to value a
business and its financial strength.
Adjusted EBITDA for
Cogeco Communications'
business units is equal to the segment profit (loss)
reported in Note 4 of the condensed interim
consolidated financial statements.
|
Adjusted
EBITDA:
- Profit for the
period
add:
- Income
taxes;
- Financial
expense;
- Depreciation and
amortization; and
- Integration,
restructuring and acquisition costs.
|
Profit for the
period
|
|
|
Adjusted EBITDA
margin:
- Adjusted
EBITDA
divided
by:
- Revenue.
|
No comparable IFRS
financial measure
|
Free cash
flow
|
Management and
investors use free cash flow to
measure Cogeco Communications' ability to repay
debt, distribute capital to its shareholders and finance
its growth.
|
Free cash
flow:
- Adjusted
EBITDA
add:
- Amortization of
deferred transaction costs and discounts on long-term
debt;
- Share-based
payment;
- Loss (gain) on
disposals and write-offs of property, plant and equipment;
and
- Defined benefit
plans expense, net of contributions;
deduct:
- Integration,
restructuring and acquisition costs;
- Financial
expense;
- Current income
taxes;
- Acquisition of
property, plant and equipment (1); and
- Repayment of lease
liabilities
|
Cash flows from
operating activities
|
Constant currency
basis
|
Revenue, operating
expenses, adjusted EBITDA,
acquisition of property, plant and equipment and free
cash flow are measures presented on a constant
currency basis to enable an improved understanding of
the Corporation's underlying financial performance,
undistorted by the effects of changes in foreign
exchange rates.
|
Constant currency
basis is obtained by translating
financial results from the current periods denominated in
US dollars at the foreign exchange rates of the comparable periods
of the prior year.
|
No comparable
IFRS financial measure
|
Capital
intensity
|
Capital intensity is
used by Cogeco Communications'
management and investors to assess the Corporation's
investment in capital expenditures in order to support a certain
level of revenue.
|
Capital
intensity:
- Acquisition of
property, plant and equipment (1)
divided
by:
- Revenue.
|
No comparable
IFRS financial measure
|
(1)
Excludes the non-cash acquisition of
right-of-use assets and the purchases of spectrum
licences.
|
|
|
|
|
|
Non-IFRS
financial
measures
|
Application
|
Calculation
|
Most
comparable
IFRS financial
measures
|
Indebtedness and
net indebtedness
|
Indebtedness and net
indebtedness are measures used
by management and investors to assess Cogeco
Communications' financial leverage, as they represent
the debt and the debt net of the available cash and
cash equivalents, respectively.
|
Indebtedness:
add:
- Principal on
long-term debt; and
- Bank
indebtedness.
|
Long-term debt,
including the
current portion
|
|
|
Net
indebtedness:
-
Indebtedness
deduct:
- Cash and cash
equivalents.
|
|
|
|
|
|
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
RECONCILIATION
The reconciliation of adjusted EBITDA to the most comparable
IFRS financial measure and the calculation of adjusted EBITDA
margin are as follows:
|
|
|
|
|
Three months ended
November 30,
|
|
|
2021
|
|
2020
|
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
Profit for the
period
|
116,610
|
|
114,896
|
|
Income
taxes
|
17,450
|
|
35,522
|
|
Financial
expense
|
44,955
|
|
35,210
|
|
Depreciation and
amortization
|
151,637
|
|
124,250
|
|
Integration,
restructuring and acquisition costs
|
18,635
|
|
1,215
|
|
Adjusted
EBITDA
|
349,287
|
|
311,093
|
|
Revenue
|
718,541
|
|
618,913
|
|
Adjusted EBITDA
margin
|
48.6
|
%
|
50.3
|
%
|
FREE CASH FLOW RECONCILIATION
The reconciliation of free cash flow to the most comparable IFRS
financial measure is as follows:
|
|
|
Three months ended
November 30,
|
|
2021
|
2020
|
(In thousands of
Canadian dollars)
|
$
|
$
|
Cash flows from
operating activities
|
286,945
|
241,725
|
Amortization of
deferred transaction costs and discounts on long-term
debt
|
2,922
|
2,278
|
Changes in other
non-cash operating activities
|
(13,174)
|
5,362
|
Income taxes
paid
|
25,360
|
41,781
|
Current income
taxes
|
(14,563)
|
(19,862)
|
Interest
paid
|
31,599
|
21,852
|
Financial
expense
|
(44,955)
|
(35,210)
|
Acquisition of
property, plant and equipment
|
(141,028)
|
(116,222)
|
Repayment of lease
liabilities
|
(995)
|
(1,088)
|
Free cash
flow
|
132,111
|
140,616
|
CAPITAL INTENSITY RECONCILIATION
The calculation of capital intensity is as follows:
|
|
|
|
|
Three months ended
November 30,
|
|
|
2021
|
|
2020
|
|
(In thousands of
Canadian dollars, except percentages)
|
$
|
|
$
|
|
Acquisition of
property, plant and equipment
|
141,028
|
|
116,222
|
|
Revenue
|
718,541
|
|
618,913
|
|
Capital
intensity
|
19.6
|
%
|
18.8
|
%
|
INDEBTEDNESS AND NET INDEBTEDNESS RECONCILIATION
The reconciliation of indebtedness and net indebtedness to the
most comparable IFRS financial measure is as follows:
|
|
|
|
At November
30,
2021
|
At August 31,
2021
|
(In thousands of
Canadian dollars)
|
$
|
$
|
Long-term debt,
including the current portion
|
4,682,821
|
3,272,216
|
Discounts,
transaction costs and other
|
61,198
|
43,032
|
Bank
indebtedness
|
13,900
|
4,460
|
Indebtedness
|
4,757,919
|
3,319,708
|
Cash and cash
equivalents
|
(408,985)
|
(365,520)
|
Net
indebtedness
|
4,348,934
|
2,954,188
|
ABOUT COGECO COMMUNICATIONS INC.
Rooted in the communities it serves, Cogeco Communications Inc.
(TSX: CCA) is a growing competitive force in the North American
telecommunications sector with a legacy of over 60 years. Through
its business units Cogeco Connexion and Breezeline (formerly
Atlantic Broadband), Cogeco Communications provides broadband
services (Internet, television and phone) to 1.6 million
residential and business customers in Quebec and Ontario in Canada as well as in twelve states in
the United States. To learn more
about Cogeco Communications' growth strategy and its commitment to
support its communities, promote inclusive growth and fight climate
change, please visit us online at corpo.cogeco.com.
For information:
Investors
Patrice
Ouimet
Senior Vice President and Chief Financial Officer
Cogeco Communications Inc.
Tel.: 514-764-4700
patrice.ouimet@cogeco.com
Media
Marie-Hélène Labrie
Senior Vice President and Chief Public Affairs, Communications and
Strategy Officer
Cogeco Communications Inc.
Tel.: 514-764-4700
marie-helene.labrie@cogeco.com
Conference
Call:
|
Friday, January 14,
2022 at 9:30 a.m. (Eastern Time)
|
|
A live audio webcast
will be available on Cogeco Communications' website at
https://corpo.cogeco.com/cca/en/investors/investor-relations/. The
webcast will be available on Cogeco
Communications' website for a three-month period. Members of the
financial community will be able to access
the conference call and ask questions. Media representatives may
attend as listeners only.
|
|
Please use the
following dial-in number to have access to the conference call 5 to
10 minutes before the start of
the conference:
|
|
Canada/United States
Access Number: 1-877-291-4570
International Access Number: 1-647-788-4919
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In order to join this
conference, participants are required to provide the operator with
the name of the company
hosting the call, that is, Cogeco Inc. or Cogeco Communications
Inc.
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The conference call
on Friday, January 14, will be followed by a live webcast of the
virtual Annual and Special
Shareholders' Meetings at 11:30 a.m. Information to join the
virtual Annual and Special Shareholders' Meetings
is available on the Cogeco Inc. and Cogeco Communications Inc.
websites. You will be able to log into the
virtual Annual and Special Shareholders' Meetings at
https://web.lumiagm.com/477874767 starting at 10:30 a.m.
on January 14, 2022. Note that the Annual and Special Shareholders'
Meetings are not accessible via the Internet
Explorer web browser.
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SOURCE Cogeco Communications Inc.