Latest news with #CogecoCommunications
Yahoo
17-07-2025
- Business
- Yahoo
Cogeco Communications Inc (CGEAF) Q3 2025 Earnings Call Highlights: Navigating Revenue ...
Canadian Internet Subscriber Growth: Added 9,400 new Internet subscribers in Canada during Q3. US Internet Subscriber Decline: Lost 10,400 Internet subscribers in the US during Q3. Revenue Decline: Consolidated revenue declined by 4.1% in constant currency. Adjusted EBITDA: Declined by 2.4% in constant currency. Free Cash Flow: Increased by 61.5% in constant currency due to lower CapEx and restructuring costs. Net Debt to Adjusted EBITDA Ratio: Improved to 3.1 turns from 3.4 in Q2. Capital Intensity: Reduced to 17.2% from 22.4% last year. Dividend Declared: $0.922 per share. Canadian Revenue Decline: 1.8% decline in revenue for Cogeco Connection in Canada. US Revenue Decline: 6.6% decline in revenue for Breezeline in the US in constant currency. Media Operations Revenue Increase: Increased by 4.4% due to growth in digital advertising revenue. Warning! GuruFocus has detected 8 Warning Signs with CGEAF. Release Date: July 16, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Cogeco Communications Inc (CGEAF) reported strong Canadian Internet subscriber growth, adding 9,400 new Internet subscribers during the quarter. The company is experiencing significant operational efficiencies and synergies, leading to a net CapEx reduction and tracking well above plan. Cogeco Communications Inc (CGEAF) is on track to generate approximately $600 million in free cash flow by fiscal 2027, with plans to continue raising dividends and lowering debt. The Canadian wireless launch is progressing, with an initial cohort of users and plans to expand sales in 12 markets ahead of a full commercial launch. Free cash flow in constant currency increased by 61.5% due to lower CapEx and restructuring costs, improving the net debt to adjusted EBITDA ratio to 3.1 turns. Negative Points Revenue in Canada declined by 1.8% due to fewer video and wireline phone subscribers and a competitive pricing environment. In the US, Breezeline's revenue declined by 6.6% in constant currency, with a loss of 10,400 Internet subscribers during the quarter. Cogeco Communications Inc (CGEAF) is facing challenges in the US market due to increased competition and internal execution gaps. The company is lowering its revenue outlook for the year due to US pressures, although this is offset by operating efficiencies. The Canadian regulatory environment remains challenging, with the CRTC maintaining a regime that favors larger telecom companies, impacting Cogeco's competitive position. Q & A Highlights Q: Can you clarify your revenue expectations for Q4? A: Patrice Ouimet, CFO: We expect Q4 revenue to be lower than Q3 results due to ongoing pressures in the US market. The exchange rate remains stable between the quarters. Q: How is the wireless launch in the US impacting your core cable business? A: Frederic Perron, CEO: Wireless is not yet materially impacting our P&L, but we expect it to become a significant contributor over time, similar to other US cable companies. Q: Can you provide insights into your transformation program and its impact on margins? A: Frederic Perron, CEO: Our transformation program is front-loaded with cost reductions, and we are ahead of expectations. We see further opportunities for cost optimization and revenue generation, particularly in the US market. Q: What are the transitional factors affecting US performance, and how do you expect Q4 to differ from Q3? A: Patrice Ouimet, CFO: The uptick in competition in three states is partly temporary. We've addressed internal execution gaps and expect improved residential internet trends in Q4, despite a one-time bulk disconnect. Q: How do you plan to approach the Canadian wireless market, and what is your pricing strategy? A: Patrice Ouimet, CFO: Our wireless product will be exclusive to wireline customers, with a time-limited launch offer. We aim to be a rational player in the market, focusing on stabilization. Q: Are there greater transformation savings than initially expected? A: Frederic Perron, CEO: Yes, we've identified greater savings in both OpEx and CapEx, particularly in CapEx this quarter. Q: How do you view the potential for asset optimization in the US? A: Patrice Ouimet, CFO: After reviewing operations, we found no immediate opportunities that meet our criteria for asset disposal. We remain open to future opportunities but are currently maintaining the status quo. Q: What is your strategy for addressing broadband penetration challenges in the US? A: Frederic Perron, CEO: We see opportunities to grow in states like Ohio where penetration is low. While we don't expect positive PSUs immediately, we anticipate improved performance over the coming quarters. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Cision Canada
16-07-2025
- Business
- Cision Canada
Cogeco Communications Announces Q3 2025 Financial Results and Canadian Wireless Launch Français
Continued strength in Canadian Internet customer growth. Canadian wireless launch underway, with a first cohort of users already on the service and expansion into 12 Canadian markets over the coming weeks. Updated fiscal 2025 financial guidelines reflect lower revenue, stable adjusted EBITDA, lower net capital expenditures and higher free cash flow compared to previously issued financial guidelines. MONTRÉAL, July 15, 2025 /CNW/ - Today, Cogeco Communications Inc. (TSX: CCA) ("Cogeco Communications" or the "Corporation") announced its financial results for the third quarter ended May 31, 2025. "Our financial results for the third quarter of fiscal 2025 were notable for our strong Canadian Internet subscriber loading, efficiencies-driven margin expansion and significant free cash flow," stated Frédéric Perron, President and CEO. "We are deeply excited to ramp up our wireless customer base in Canada over the coming weeks, adding to our prior launch of a similar service in the U.S. last year. Wireless will become a powerful tool to retain and grow our North American wireline customer base over time. "We already have a first cohort using the wireless service and are progressively expanding to cover 12 Canadian markets (Alma, Magog, Rimouski, Saint-Georges, Saint-Hyacinthe, Saint-Sauveur and Trois-Rivières in Québec, and Brockville, Chatham, Cobourg, Cornwall and Welland in Ontario) over the coming weeks, in anticipation of a full geographic deployment in the fall season. "We continued to solidly grow our Canadian Internet customer base for yet another quarter. While we experienced higher-than-usual customer losses in the U.S., this was partially caused by a few temporary factors. We are implementing several go-to-market enhancements as part of our transformation, and are confident that our U.S. customer trends will improve as these initiatives are executed over the coming quarters." Consolidated financial highlights Operating results For the third quarter of fiscal 2025 ended on May 31, 2025: Revenue decreased by 2.7% to $730.7 million. On a constant currency basis (2), revenue decreased by 4.1%, mainly explained as follows: American telecommunications' revenue decreased by 3.5%, or 6.6% in constant currency, mainly due to a decline in our subscriber base, especially for entry-level services, and to a higher proportion of customers subscribing to Internet-only services. Canadian telecommunications' revenue decreased by 1.8%, mainly due to a lower revenue per customer as a result of a decline in video and wireline phone service subscribers as an increasing proportion of customers subscribe to Internet-only services, as well as a competitive pricing environment, partly offset by the cumulative effect of high-speed Internet service additions over the past year. Adjusted EBITDA decreased by 0.9% to $362.4 million. On a constant currency basis, adjusted EBITDA decreased by 2.4% mainly due to lower revenue in both the American and Canadian telecommunications segments, offset in part by lower operating expenses driven by cost reduction initiatives and operating efficiencies across the Corporation as a result of our ongoing three-year transformation program. American telecommunications' adjusted EBITDA decreased by 0.5%, or 3.7% in constant currency. Canadian telecommunications' adjusted EBITDA decreased by 1.5%, or 1.3% in constant currency. Profit for the period amounted to $73.3 million, of which $69.9 million, or $1.64 per diluted share, was attributable to owners of the Corporation compared to $76.3 million, $70.4 million, and $1.67 per diluted share, respectively, in the comparable period of fiscal 2024. The decreases in profit for the period and profit attributable to owners of the Corporation resulted mainly from higher depreciation and amortization expense, financial expense and income tax expense, as well as lower adjusted EBITDA, partly offset by lower acquisition, integration, restructuring and other costs. Adjusted profit attributable to owners of the Corporation (3) was $77.2 million, or $1.82 per diluted share (3), compared to $103.6 million, or $2.45 per diluted share, last year. Net capital expenditures were $125.5 million, a decrease of 25.5% compared to $168.4 million in the same period of the prior year. In constant currency, net capital expenditures (2) were $123.3 million, a decrease of 26.8% compared to last year, mainly due to operational efficiencies, lower spending in the Canadian telecommunications segment, partially due to the timing of certain initiatives, as well as lower spending in the American telecommunications segment, mostly due to lower construction activity. Net capital expenditures in connection with network expansion projects were $13.3 million ($13.2 million in constant currency) compared to $24.4 million in the same period of the prior year. Excluding network expansion projects, net capital expenditures were $112.2 million, a decrease of 22.1% compared to $144.0 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects (2) were $110.1 million, a decrease of 23.5% compared to last year. Fibre-to-the-home network expansion projects continued, mostly in Canada, with the addition of close to 9,500 homes passed during the third quarter of fiscal 2025. Capital intensity was 17.2% compared to 22.4% last year. Excluding network expansion projects, capital intensity was 15.4% compared to 19.2% in the same period of the prior year. Acquisition of property, plant and equipment decreased by 26.4% to $125.9 million, mainly resulting from lower spending. Free cash flow (1) increased by 63.2%, or 61.5% in constant currency, and amounted to $143.9 million, or $142.4 million in constant currency (2), mainly due to lower net capital expenditures and acquisition, integration, restructuring and other costs, offset in part by higher financial expense, lower adjusted EBITDA and higher current income taxes. Free cash flow, excluding network expansion projects (1) increased by 39.6%, or 38.2% in constant currency, and amounted to $157.2 million, or $155.6 million in constant currency. Cash flows from operating activities increased by 20.1% to $400.8 million, mostly due to higher cash from other non-cash operating activities, and lower income taxes paid, partly offset by higher interest paid. At its July 15, 2025 meeting, the Board of Directors of Cogeco Communications declared a quarterly eligible dividend of $0.922 per share, an increase of 8.0% compared to $0.854 per share in the comparable quarter of fiscal 2024. FISCAL 2025 REVISED FINANCIAL GUIDELINES Cogeco Communications has revised its fiscal 2025 financial guidelines as issued on October 31, 2024 for revenue, net capital expenditures, capital intensity and free cash flow. Adjusted EBITDA projections remain the same as previously disclosed. The Corporation expects additional pressure on its revenue, particularly in the United States, driven by increased competition. As part of its three-year transformation program, the Corporation has initiated several cost reduction initiatives and operating efficiencies across the organization in order to minimize the revenue impact on adjusted EBITDA. Additionally, net capital expenditures are expected to be lower than under the previous financial guidelines, partially resulting from operational efficiencies following the combination of the Canadian and U.S. management teams. Consequently, compared to fiscal 2024, on a constant currency and consolidated basis, we are lowering Cogeco Communications' revenue projections for fiscal 2025 to a low single digit decline, while adjusted EBITDA is expected to remain stable. In addition, due to some better-than-anticipated transformation-related cost savings and lower expected net capital expenditures, we are increasing the Corporation's free cash flow financial guidelines, from a decrease compared to fiscal 2024 to a stable free cash flow, while reducing net capital expenditures and capital intensity projections. (1) Percentage of changes compared to fiscal 2024. (2) Fiscal 2025 financial guidelines are based on a USD/CDN constant exchange rate of 1.3606 USD/CDN. (3) The assumed current income tax effective rate is approximately 11.5% (14% under the previous financial guidelines). 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. Change in constant currency Change in constant currency Three and nine months ended May 31 2025 2024 (1) Change (2) (3) 2025 2024 (1) Change (2) (3) (In thousands of Canadian dollars, except % and per share data) $ $ % % $ $ % % Operations Revenue 730,679 750,583 (2.7) (4.1) 2,201,800 2,228,773 (1.2) (2.8) Adjusted EBITDA (3) 362,377 365,824 (0.9) (2.4) 1,084,091 1,071,896 1.1 (0.4) Adjusted EBITDA margin (3) 49.6 % 48.7 % 49.2 % 48.1 % Acquisition, integration, restructuring and other costs (4) 9,211 45,669 (79.8) 7,288 49,170 (85.2) Profit for the period 73,300 76,334 (4.0) 260,097 268,648 (3.2) Profit for the period attributable to owners of the Corporation 69,895 70,402 (0.7) 245,157 253,576 (3.3) Adjusted profit attributable to owners of the Corporation (3)(5) 77,186 103,597 (25.5) 248,553 301,377 (17.5) Cash flow Cash flows from operating activities 400,789 333,626 20.1 872,866 856,042 2.0 Free cash flow (1)(3) 143,946 88,185 63.2 61.5 409,407 327,832 24.9 23.8 Free cash flow, excluding network expansion projects (1)(3) 157,231 112,618 39.6 38.2 460,064 408,315 12.7 11.8 Acquisition of property, plant and equipment 125,933 171,034 (26.4) 438,547 504,830 (13.1) Net capital expenditures (3)(6) 125,462 168,384 (25.5) (26.8) 434,002 485,580 (10.6) (12.3) Net capital expenditures, excluding network expansion projects (3) 112,177 143,951 (22.1) (23.5) 383,345 405,097 (5.4) (7.4) Capital intensity (3) 17.2 % 22.4 % 19.7 % 21.8 % Capital intensity, excluding network expansion projects (3) 15.4 % 19.2 % 17.4 % 18.2 % Per share data (7) Earnings per share Basic 1.66 1.68 (1.2) 5.82 5.91 (1.5) Diluted 1.64 1.67 (1.8) 5.78 5.89 (1.9) Adjusted diluted (3)(5) 1.82 2.45 (25.7) 5.86 7.00 (16.3) Dividends per share 0.922 0.854 8.0 2.766 2.562 8.0 (1) During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment, which includes proceeds from sale and leaseback transactions. Proceeds from sale and leaseback and other disposals of property, plant and equipment amounted to $2.2 million and $22.7 million for the three and nine-month periods ended May 31, 2025, respectively ($0.9 million and $2.8 million, respectively, for the same periods of fiscal 2024). Comparative figures were restated to conform to the current presentation. For further details, please refer to the "Non-IFRS Accounting Standards and other financial measures" section of this press release. (2) 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 rates of the comparable periods of the prior year. For the three and nine-month periods ended May 31, 2024, the average foreign exchange rates used for translation were 1.3628 USD/CDN and 1.3578 USD/CDN, respectively. (3) 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 Accounting Standards measures. Change in constant currency, capital intensity, excluding network expansion projects and adjusted diluted earnings per share are non-IFRS Accounting Standards ratios. These indicated terms do not have standardized definitions prescribed by IFRS Accounting Standards 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 Accounting Standards and other financial measures" section of this press release. (4) For the three and nine-month periods ended May 31, 2025, acquisition, integration, restructuring and other costs were mainly related to costs associated with the configuration and customization related to cloud computing and other arrangements, and additional restructuring costs incurred in connection with certain cost optimization initiatives undertaken. In addition, for the nine-month period ended May 31, 2025, acquisition, integration, restructuring and other costs were partly offset by a $13.8 million non-cash gain recognized during the first quarter of fiscal 2025 in connection with a sale and leaseback transaction of a building in Ontario. For the three and nine-month periods ended May 31, 2024, acquisition, integration, restructuring and other costs were mostly related to restructuring costs recognized during the third quarter of fiscal 2024 in connection with the strategic transformation announced in May 2024. (5) Excludes the impact of non-cash impairment charges, acquisition, integration, restructuring and other costs, and gains/losses on debt modification and/or extinguishment, all net of tax and non-controlling interest. (6) Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases, and related borrowing costs, of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance. As at May 31, 2025 August 31, 2024 (In thousands of Canadian dollars) $ $ Financial condition Cash and cash equivalents 244,750 76,335 Total assets 9,866,415 9,675,009 Long-term debt Current 338,567 361,808 Non-current 4,437,846 4,448,261 Net indebtedness (1) 4,579,854 4,803,629 Equity attributable to owners of the Corporation 3,126,389 2,979,691 (1) Net indebtedness is a capital management measure. For more information on this financial measure, please consult the "Non-IFRS Accounting Standards and other financial measures" section of the Corporation's MD&A for the three and nine-month periods ended May 31, 2025, available on SEDAR+ at 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 strategy" and "Fiscal 2025 financial guidelines" sections of the Corporation's fiscal 2024 annual Management's Discussion and Analysis ("MD&A"), and the "Fiscal 2025 revised financial guidelines" section of the fiscal 2025 third-quarter 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 and technology ecosystems and disruptive competitive strategies adopted by our competitors), business risks, regulatory risks, tax risks, technology risks (including cybersecurity), financial risks (including variations in currency and interest rates), economic conditions (including inflation pressuring revenue, trade tariffs, reduced consumer spending and increasing costs), talent management risks (including the highly competitive market for a 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, sustainability and sustainability reporting 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 fiscal 2024 annual MD&A and of the fiscal 2025 third-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 nine-month periods ended May 31, 2025, the Corporation's condensed interim consolidated financial statements and the notes thereto for the same periods prepared in accordance with IFRS ® Accounting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards") and the Corporation's fiscal 2024 Annual Report. Non-IFRS Accounting Standards and other financial measures This press release includes references to non-IFRS Accounting Standards 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 Accounting Standards and other financial measures to the most directly comparable IFRS Accounting Standards measures are provided below. Certain additional disclosures for non-IFRS Accounting Standards and other financial measures used in this press release have been incorporated by reference and can be found in the "Non-IFRS Accounting Standards and other financial measures" section of the Corporation's MD&A for the three and nine-month periods ended May 31, 2025, available on SEDAR+ at The following non-IFRS Accounting Standards measures are used as a component of Cogeco Communications' non-IFRS Accounting Standards ratios. Financial measures presented on a constant currency basis for the three and nine-month periods ended May 31, 2025 are translated at the average foreign exchange rate of the comparable periods of the prior year, which were 1.3628 USD/CDN and 1.3578 USD/CDN, respectively. Constant currency basis and foreign exchange impact reconciliation Consolidated Three months ended May 31 2025 2024 (1) Change (In thousands of Canadian dollars, except percentages) Actual Foreign exchange impact In constant currency Actual Actual In constant currency $ $ $ $ % % Revenue 730,679 (11,224) 719,455 750,583 (2.7) (4.1) Operating expenses 363,380 (5,932) 357,448 379,521 (4.3) (5.8) Management fees – Cogeco Inc. 4,922 — 4,922 5,238 (6.0) (6.0) Adjusted EBITDA 362,377 (5,292) 357,085 365,824 (0.9) (2.4) Free cash flow (1) 143,946 (1,552) 142,394 88,185 63.2 61.5 Net capital expenditures 125,462 (2,162) 123,300 168,384 (25.5) (26.8) (1) During the fourth quarter of fiscal 2024, the Corporation updated its free cash flow calculation to include proceeds on disposals of property, plant and equipment, which includes proceeds from sale and leaseback transactions. Comparative figures were restated to conform to the current presentation. Nine months ended May 31 2025 2024 (1) Change (In thousands of Canadian dollars, except percentages) Actual Foreign exchange impact In constant currency Actual Actual In constant currency $ $ $ $ % % Revenue 2,201,800 (35,353) 2,166,447 2,228,773 (1.2) (2.8) Operating expenses 1,102,944 (18,930) 1,084,014 1,141,163 (3.3) (5.0) Management fees – Cogeco Inc. 14,765 — 14,765 15,714 (6.0) (6.0) Adjusted EBITDA 1,084,091 (16,423) 1,067,668 1,071,896 1.1 (0.4) Free cash flow (1) 409,407 (3,516) 405,891 327,832 24.9 23.8 Net capital expenditures 434,002 (8,192) 425,810 485,580 (10.6) (12.3) Canadian telecommunications segment Three months ended May 31 2025 2024 Change (In thousands of Canadian dollars, except percentages) Actual Foreign exchange impact In constant currency Actual Actual In constant currency $ $ $ $ % % Revenue 374,900 — 374,900 381,877 (1.8) (1.8) Operating expenses 176,281 (387) 175,894 180,204 (2.2) (2.4) Adjusted EBITDA 198,619 387 199,006 201,673 (1.5) (1.3) Net capital expenditures 64,295 (346) 63,949 91,093 (29.4) (29.8) Nine months ended May 31 2025 2024 Change (In thousands of Canadian dollars, except percentages) Actual Foreign exchange impact In constant currency Actual Actual In constant currency $ $ $ $ % % Revenue 1,122,377 — 1,122,377 1,131,804 (0.8) (0.8) Operating expenses 531,788 (1,118) 530,670 535,018 (0.6) (0.8) Adjusted EBITDA 590,589 1,118 591,707 596,786 (1.0) (0.9) Net capital expenditures 212,564 (1,046) 211,518 285,274 (25.5) (25.9) American telecommunications segment Three months ended May 31 2025 2024 Change (In thousands of Canadian dollars, except percentages) Actual Foreign exchange impact In constant currency Actual Actual In constant currency $ $ $ $ % % Revenue 355,779 (11,224) 344,555 368,706 (3.5) (6.6) Operating expenses 178,325 (5,543) 172,782 190,327 (6.3) (9.2) Adjusted EBITDA 177,454 (5,681) 171,773 178,379 (0.5) (3.7) Net capital expenditures 57,612 (1,812) 55,800 72,782 (20.8) (23.3) Nine months ended May 31 2025 2024 Change (In thousands of Canadian dollars, except percentages) Actual Foreign exchange impact In constant currency Actual Actual In constant currency $ $ $ $ % % Revenue 1,079,423 (35,353) 1,044,070 1,096,969 (1.6) (4.8) Operating expenses 545,448 (17,798) 527,650 574,070 (5.0) (8.1) Adjusted EBITDA 533,975 (17,555) 516,420 522,899 2.1 (1.2) Net capital expenditures 211,741 (7,131) 204,610 191,490 10.6 6.9 Adjusted profit attributable to owners of the Corporation Three months ended May 31 Nine months ended May 31 2025 2024 2025 2024 (In thousands of Canadian dollars) $ $ $ $ Profit for the period attributable to owners of the Corporation 69,895 70,402 245,157 253,576 Acquisition, integration, restructuring and other costs 9,211 45,669 7,288 49,170 Impairment of property, plant and equipment 1,574 — 1,574 — Loss on debt extinguishment (1) — — — 16,880 Tax impact for the above items (2,546) (12,081) (4,126) (17,461) Non-controlling interest impact for the above items (948) (393) (1,340) (788) Adjusted profit attributable to owners of the Corporation 77,186 103,597 248,553 301,377 (1) Included within financial expense. Free cash flow and free cash flow, excluding network expansion projects reconciliations Three months ended May 31 Nine months ended May 31 2025 2024 (1) 2025 2024 (1) (In thousands of Canadian dollars) $ $ $ $ Cash flows from operating activities 400,789 333,626 872,866 856,042 Changes in other non-cash operating activities (103,315) (76,679) (4,798) (21,491) Income taxes paid (received) (12,101) 3,918 1,981 (807) Current income taxes (11,103) (3,177) (35,401) (19,594) Interest paid 69,857 62,509 193,523 194,769 Financial expense (75,861) (64,308) (204,353) (215,765) Loss on debt extinguishment (2) — — — 16,880 Amortization of deferred transaction costs and discounts on long-term debt (2) 2,608 2,272 6,300 6,953 Net capital expenditures (3) (125,462) (168,384) (434,002) (485,580) Proceeds from sale and leaseback and other disposals of property, plant and equipment (1) 2,188 885 22,732 2,784 Repayment of lease liabilities (3,654) (2,477) (9,441) (6,359) Free cash flow (1) 143,946 88,185 409,407 327,832 Net capital expenditures in connection with network expansion projects 13,285 24,433 50,657 80,483 Free cash flow, excluding network expansion projects (1) 157,231 112,618 460,064 408,315 Adjusted EBITDA reconciliation Three months ended May 31 Nine months ended May 31 2025 2024 2025 2024 (In thousands of Canadian dollars) $ $ $ $ Profit for the period 73,300 76,334 260,097 268,648 Income taxes 20,180 11,199 69,709 47,117 Financial expense 75,861 64,308 204,353 215,765 Impairment of property, plant and equipment 1,574 — 1,574 — Depreciation and amortization 182,251 168,314 541,070 491,196 Acquisition, integration, restructuring and other costs 9,211 45,669 7,288 49,170 Adjusted EBITDA 362,377 365,824 1,084,091 1,071,896 Net capital expenditures and free cash flow, excluding network expansion projects reconciliations Net capital expenditures Free cash flow (1) During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment, which includes proceeds from sale and leaseback transactions. Comparative figures were restated to conform to the current presentation. (1) During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment, which includes proceeds from sale and leaseback transactions. Comparative figures were restated to conform to the current presentation. Additional information Additional information relating to the Corporation is available on SEDAR+ at and on the Corporation's website at About Cogeco Communications Inc. Cogeco Communications Inc. is a leading telecommunications provider committed to bringing people together through powerful communications and entertainment experiences. We provide world-class Internet, video and wireline phone services to 1.6 million residential and business subscribers in Canada and thirteen states in the United States. We also offer wireless services in most of our U.S. operating territory. Our services are marketed under the Cogeco and oxio brands in Canada, and under the Breezeline brand in the U.S. We take pride in our strong presence in the communities we serve and in our commitment to a sustainable future. 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 [email protected] Media Claudja Joseph Director, Communications Cogeco Communications Inc. Tel.: 514 764-4600 [email protected]
Yahoo
22-06-2025
- Business
- Yahoo
Investors in Cogeco Communications (TSE:CCA) have seen decent returns of 40% over the past year
Passive investing in index funds can generate returns that roughly match the overall market. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Cogeco Communications Inc. (TSE:CCA) share price is 32% higher than it was a year ago, much better than the market return of around 19% (not including dividends) in the same period. So that should have shareholders smiling. Unfortunately the longer term returns are not so good, with the stock falling 24% in the last three years. Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. Over the last twelve months, Cogeco Communications actually shrank its EPS by 6.6%. So we don't think that investors are paying too much attention to EPS. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment. Absent any improvement, we don't think a thirst for dividends is pushing up the Cogeco Communications' share price. We don't find the recent revenue growth particularly impressive at a glance, but shareholders could be projecting an uptick. You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values). We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Cogeco Communications It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Cogeco Communications the TSR over the last 1 year was 40%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence! It's nice to see that Cogeco Communications shareholders have received a total shareholder return of 40% over the last year. Of course, that includes the dividend. Notably the five-year annualised TSR loss of 3% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Cogeco Communications better, we need to consider many other factors. For example, we've discovered 1 warning sign for Cogeco Communications that you should be aware of before investing here. Cogeco Communications is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian exchanges. — Investing narratives with Fair Values Vita Life Sciences Set for a 12.72% Revenue Growth While Tackling Operational Challenges By Robbo – Community Contributor Fair Value Estimated: A$2.42 · 0.1% Overvalued Vossloh rides a €500 billion wave to boost growth and earnings in the next decade By Chris1 – Community Contributor Fair Value Estimated: €78.41 · 0.1% Overvalued Intuitive Surgical Will Transform Healthcare with 12% Revenue Growth By Unike – Community Contributor Fair Value Estimated: $325.55 · 0.6% Undervalued View more featured narratives — Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
07-06-2025
- Business
- Business Insider
National Bank Keeps Their Buy Rating on Cogeco Communications (CGEAF)
In a report released today, Adam Shine from National Bank maintained a Buy rating on Cogeco Communications (CGEAF – Research Report), with a price target of C$85.00. The company's shares closed yesterday at $50.50. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter According to TipRanks, Shine is a 3-star analyst with an average return of 2.9% and a 50.79% success rate. Shine covers the Communication Services sector, focusing on stocks such as BCE, Rogers Communication, and Telus. Currently, the analyst consensus on Cogeco Communications is a Moderate Buy with an average price target of $59.27, implying a 17.37% upside from current levels. In a report released on June 3, TD Securities also maintained a Buy rating on the stock with a C$98.00 price target.
Yahoo
18-05-2025
- Business
- Yahoo
Cogeco - An ultra-cheap Income Stock
The following stats of Cogeco Inc. (TSX:CGO) a Telecom company in Quebec, Canada and operating in both Canada and the US, caught my attention. PE: 3.59 Dividend yield: 6.5% FCF Yield: 52.9% PB: 0.61 These ratios suggest that the company is very cheap. Cogeco Inc. is a Canadian telecommunications and media company that operates in Canada and the United States via its subsidiary Cogeco Communications (TSX:CCA) which also has its own stock listing. Cogeco Communications provides a variety of services to residential and business customers, including: - Internet Services: Cogeco offers high-speed internet access through its hybrid fibre coaxial cable network, ensuring reliable and fast connections for activities like streaming, gaming, and remote work - Television Services: The company provides cable TV with high-definition channels, on-demand options, and customizable packages. - Phone Services: Cogeco delivers landline and mobile telephony services with features such as voicemail, call forwarding, and conference calling. - Wireless Services: In the U.S., Cogeco also offers wireless services under the Breezeline brand. It also plans to offer wireless service in Canada. It should be noted though that Cogeco Communications Inc. has a much larger market cap of C$2.7 Billion than that of the parent (C$561 million). Cogeco has a 80% controlling interest in Cogeco Communication and owns 28% of the equity. This means that Cogeco Inc. stock is selling at about 36% discount to Cogeco Communication's stock. Cogeco also owns Cogeco Media which is active in Radio broadcasting in the province of Quebec, Canada. Cogeco Inc. is controlled primarily by the Audet family through their holding company, Gestion Audem Inc., which holds 79.78% of the voting rights in Cogeco Inc. Cogeco Inc. is a publicly traded company listed on the Toronto Stock Exchange (TSX: CGO), but its multiple voting shares ensure that effective control remains with Gestion Audem Inc. Cogeco operates under different brands depending on the region: Cogeco Connexion in Canada (Ontario and Quebec). Breezeline in the United States (serving 13 states). The company generates revenue primarily through subscription-based services, advertising, equipment sales, installation fees, and business solutions. It also invests in innovative technologies to maintain its competitive edge in the telecommunications industry. Growth Rates per share are good over 10 year and 5 year periods. These are excellent numbers when seen the context of a generally low-growth and mature industry. Growth Rates (Per Share) Fiscal Period 10-Year 5-Year 1-Year Revenue 6.50% 11.60% 44.10% EPS without NRI 6.80% 14.80% 28.50% EBIT 8.80% 10.50% 39.60% EBITDA 8.90% 10.00% 54.70% Free Cash Flow -0.90% -12.80% 68.60% Dividends 14.00% 14.90% 12.10% Book Value 9.50% 11.50% 9.00% Cogeco Inc. (TSX: CGO) is executing a three-year strategic transformation (20242027) focused on increasing agility, efficiency, and growth. The company is streamlining operations by merging its U.S. and Canadian telecom teams into a unified North American structure, enhancing cross-border collaboration and creating centralized hubs for digital innovation and advanced analytics. A key growth driver is its planned entry into the Canadian wireless market in 2025 through the MVNO framework, complementing ongoing U.S. wireless expansion in regions like Ohio, where it aims to scale sales and optimize high-margin offerings. MVNO stands for Mobile Virtual Network Operator. It is a company that provides mobile phone services but does not own the wireless infrastructure that it uses. It plans to bundle wireless service with its wireline service. Cogeco is prioritizing digital transformation, modernizing networks, digitizing customer interactions, and leveraging analytics to improve decision-making while advancing rural connectivity projects. Financially, the company targets $100M+ in annual synergies through cost efficiencies and operational streamlining, alongside disciplined capital allocation to support EBITDA margin expansion and sustainable free cash flow. Customer-centric initiatives remain central, with a focus on boosting internet subscriber growth in Canada (via Cogeco and Oxio brands), improving U.S. retention, and enhancing service delivery. Despite near-term capital expenditures, By balancing innovation, market expansion, and shareholder returns, Cogeco aims to solidify its position as a small but nimble competitor in North America's evolving telecom sector. Cogeco does carry a large debt load (Debt/Equity is 6.04). Telecom is a capital intensive business especially now as it rolls out Fiber to the Premises (FTTP). It is also progressing its wireless service selectively in its service area in the US and soon Canada. However management is predicting that capital expenditure will decline in the near future and this will increase free cash flow. Debt/EBITDA is fair at 3.72. Cogeco plans to bring this to 3.0. Interest coverage (operating income/ interest expense) is 2.76. Given stable operating cash flow this debt is not alarming. Cogeco Inc. holds debt, and its subsidiary, Cogeco Communications Inc. (CCA), also has its own debt. While the debt of Cogeco Communications Inc. is non-recourse to Cogeco Inc., Cogeco Inc. includes CCA's debt in its leverage calculations. Cogeco raised its quarterly dividend by 8.0% to $0.922/share, signaling confidence in cash flow stability. Cogeco has been paying dividend since 1989 with no dividend reduction in the last 19 years. The company has a forward dividend yield of 6.69%. The company's recent payout ratio was only 0.23, so it has good capacity to expand its dividend. 5 year dividend growth rate is 14.9%. Cogeco's dividend metrics compares well against it North American peers. Ticker Current Price Company Earnings Yield % Dividend Yield % Dividend Yield % (10y Median) Dividend Payout Ratio Continuous Dividend Start Year 5-Year Dividend Growth Rate (Per Share) TSX:CGO 64.57 Cogeco Inc 13.65 5.61 2.29 0.23 1989 14.9 TSX:QBR.B 37.65 Quebecor Inc 8.74 3.52 1.8 0.4 2004 23.1 TSX:RCI.B 35.71 Rogers Communications Inc 9.05 5.6 3.34 0.4 2003 0 TSX:BCE 30.11 BCE Inc 1.39 13.25 5.39 1.46 1989 4.8 TSX:T 22.07 TELUS Corp 3.58 7.17 4.44 1.92 1999 6.8 TSX:CCA 68.37 Cogeco Communications Inc 11.17 5.29 2.42 0.39 2004 10.2 T 27.72 AT&T Inc 5.88 4 7.31 0.5 1985 -14.7 VZ 43.99 Verizon Communications Inc 9.55 6.13 4.72 0.58 1985 2 The chart below illustrates Cogeco's share price in Canadian dollars over the past five years, compared to the median justified price ratios derived from historical price multiples (PE Ratio, PS Ratio, PB Ratio, and Price-to-Free-Cash-Flow). The chart clearly demonstrates a significant discount in Cogeco's share price relative to recent multiples. TSX:CGO Data by GuruFocus Warning! GuruFocus has detected 6 Warning Signs with TSX:CGO. The following table compares selected metrics for Cogeco (and its subsidiary Cogeco Communications) with its Canadian peers and a couple of US telecom companies. Cogeco has lower PE and EV/EBITDA compared to this set. Note also the higher 5-year EBITDA growth rate. Ticker Company Current Price Market Cap EV-to-EBITDA EV-to-EBITDA(10y Median) PE Ratio without NRI 5-Year EBITDA GrowthRate (Per Share) TSX:CGO Cogeco Inc 64.57 438.85 6.02 5.82 4.2 10 TSX:CCA Cogeco Communications Inc 68.37 2,060.86 5.97 7.01 7.49 8.2 TSX:QBR.B Quebecor Inc 37.65 6,279.58 7.15 7.66 11.23 7 TSX:RCI.B Rogers Communications Inc 35.71 14,092.67 7.23 9.25 7.1 7.9 TSX:BCE BCE Inc 30.11 19,867.66 8.67 9.13 11.03 -2.8 TSX:T TELUS Corp 22.07 23,920.03 9.31 9.09 26.78 0 T AT&T Inc 27.72 199,462.09 7.83 6.57 12.49 -1.8 VZ Verizon Communications Inc 43.99 185,473.05 7.33 7.94 9.5 -0.4 Gurufocus DCF Calculator (below) also indicates a large margin of safety even after using a conservative growth rate of 3% and a discount rate of 10%. Owner Earnings is a cash flow concept introduced by Warren Buffett (Trades, Portfolio) in his 1986 Berkshire Hathaway company letter to shareholders. At this time that companies were not required to produce a cash flow statement nor were stock based compensation such a big concern. Buffet's formulations of owners earnings removes non-cash distortions from earnings to focuses the investors attention on how much cash they are getting as partial owners of the company at the end of the period. Buffet explained Owners Earnings as follows: Owner Earnings = (a) Net Income plus (b) depreciation, depletion, amortization, and other non-cash charges minus (c) average annual maintenance capital expenditures. Owners Earnings is similar to free cash flow, but I think a superior metric because it starts from net earnings, so takes stock-based compensation as well as maintenance capex into account. Unlike Free Cash Flow, owner's earnings includes stock based compensation and maintenance capex which can be a significant expense for some companies. The following table summarizes Cogeco's owner earnings over the last 10 years. Note the owner yield is the reciprocal of price to owner earnings. Another way to think about this is that investors can payback an investment in Cogeco stock in less than 4 years of owner earnings. Cogeco Inc Now 2024-08 2023-08 2022-08 2021-08 2020-08 2019-08 2018-08 2017-08 2016-08 2015-08 Price-to-Owner-Earnings 3.96 2.81 17.72 2.4 3.81 4.46 5.31 15.38 3.58 4.14 3.84 Owner Yield 25.25% 35.59% 5.64% 41.67% 26.25% 22.42% 18.83% 6.50% 27.93% 24.15% 26.04% Warren Buffett (Trades, Portfolio)'s equity bond method is a mental model for valuing stocks by comparing them to bonds, focusing on the stock's earnings yield as if it were a bond's yield. The approach involves treating a stock as if it pays out its earnings as a coupon, with the earnings yield calculated by dividing earnings per share (EPS) by the share price. For example, if a company has an EPS of $5 and a share price of $100, the earnings yield is 5%. Investors then compare this yield to the yield on a risk-free government bond, such as a US Treasury. If the stock's earnings yield is higher, and the company is of high quality with good growth prospects, the stock may be undervalued or a better investment than the bond. Unlike bonds, which pay a fixed coupon, a stock's earnings can grow over time, meaning the yield on your original investment can increase as the company's earnings grow, compounding your returns. Buffett uses this method to identify companies that can compound returns over many years, focusing on high-quality businesses with durable competitive advantages and the ability to reinvest earnings at high rates of return. However, the equity bond method is not a standalone tool; Buffett also considers other factors such as return on equity, debt levels, and the company's competitive moat. In summary, the equity bond method reframes stock investing as buying a bond with a variable, potentially growing yield. By comparing a stock's earnings yield to bond yields and factoring in the company's growth prospects, investors can make more rational, businesslike decisions about where to allocate capital for the best long-term returns. While I am not confident that Cogeco has an economic moat which would attract an investor like Buffet it does have an enormous earnings yield which has been in place for a while. Earning yield is the reciprocal of the PE Ratio expressed as a percentage. Cogeco's PE Ratio (without NRI, or Non-recurring items) is 3.53. This works out to an earnings yield of 28.3%. Cogeco's Shiller PE is 7.13. (Shiller PE also known as E10 is a concept invented by Prof. Robert Shiller. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.) Converting Shiller PE to Shiller Earnings yield we get 14.02%. Both these earnings yield are far above the 10 years US Treasury bond yield which is currently at 4.5% and the analogous Canada 10 year bond yield is 3.46%. This would indicate an healthy margin of safety. Cogeco's 10-year median Return on Equity (ROE%) is quite good at about 17%. All in all, while it does not appear that Cogeco has an economic moat The company's financial stability and regional strength are positives, but they do not translate into the kind of durable, structural advantages that would protect it from competition over the long term. Investors should view Cogeco as a solid, income-generating telecom stock, but not as a moat-protected business. It is a capital intensive business subject to high competition. Cogeco appears to be a solid low growth income stock which pays a large and reliable dividend of 6.24%. It is also buying back stock with 3 year buyback ratio of 15.9. The company is family controlled and seem to have good stewardship. Earnings per share grew by over 28% over the past year and 6.8% CAGR over the past 10 years. Debt is high but the company is working to bring it down. It is Trading at good value compared to peers and industry. This article first appeared on GuruFocus. Error while retrieving data Sign in to access your portfolio Error while retrieving data
