Cogeco Connexion reported a fifth consecutive quarter of strong Internet subscriber growth, driven by a mix of new customers added under the Cogeco brand, which include fibre-to-the-home network expansions, and its digital oxio brand. Breezeline to launch mobile service within its U.S. broadband footprint starting this spring. Revenue declined by 0.8% compared to the same period last year to $730.5 million, as revenue growth at Cogeco Connexion was offset by lower revenue at Breezeline. Adjusted EBITDA(1) of $347.1 million decreased by 1.2% over last year, in line with our expectations. Profit for the period amounted to $96.6 million, a decrease of 7.4%, of which $93.7 million was attributable to owners of the Corporation. Earnings per share on a diluted basis increased to $2.20 from $2.19 in the second quarter of fiscal 2023, reflecting the benefit of the Corporation's repurchase and cancellation of shares. Free cash flow(1) amounted to $100.2 million, a decrease of 15.1% compared to last year, due to higher net capital expenditures, while cash flow from operating activities increased by 40.6% to $285.4 million. Free cash flow, excluding network expansion projects(1) decreased by 22.2% to $124.5 million. Cogeco Communications maintains its fiscal 2024 financial guidelines. A quarterly dividend of $0.854 per share was declared, representing a 10.1% increase over the prior year. MONTRÉAL, April 11, 2024 /CNW/ - Today, Cogeco Communications Inc. (TSX:CCA) ("Cogeco Communications" or the "Corporation") announced its financial results for the second quarter ended February 29, 2024. "During the quarter, we continued to execute on multiple initiatives, including pursuing several fibre-to-the-home network expansion projects," stated Frédéric Perron, President and Chief Executive Officer of Cogeco Communications Inc. "We also leveraged the technological enhancements we have made to our networks to drive growth in our Internet customer base, notably those subscribing to higher speeds. On the wireless front, we recently announced the launch of Breezeline Mobile, using a capital-light MVNO approach, and are making progress with our wireless preparations in Canada." "While we operate in a challenging environment, value creation continues to be at the forefront of our strategy and culture. Our plans will therefore place a strong focus on driving profitable growth through digitization and operational effectiveness," continued Mr. Perron. "I look forward to leading Cogeco Communications on its ambitious path of delivering high-quality and cost-effective telecommunications services to our customers across both of the countries we serve. I want to thank all of our customers and stakeholders for their support in this journey," concluded Mr. Perron. Consolidated Financial Highlights Three months ended February 29,2024 February 28,2023 Change Change in constant currency (1) (In thousands of Canadian dollars, except % and per share data) (unaudited) $ $ % % Revenue 730,501 736,646 (0.8) (0.7) Adjusted EBITDA (1) 347,112 351,215 (1.2) (1.0) Adjusted EBITDA margin (1) 47.5 % 47.7 % Profit for the period 96,562 104,262 (7.4) Profit for the period attributable to owners of the Corporation 93,681 98,378 (4.8) Adjusted profit attributable to owners of the Corporation (1)(3) 94,054 103,488 (9.1) Cash flows from operating activities 285,434 203,043 40.6 Free cash flow (1) 100,155 117,939 (15.1) (15.4) Free cash flow, excluding network expansion projects (1) 124,545 160,181 (22.2) (22.5) Acquisition of property, plant and equipment 180,247 172,967 4.2 Net capital expenditures (1)(2) 170,769 156,125 9.4 9.8 Net capital expenditures, excluding network expansion projects (1) 146,379 113,883 28.5 29.0 Capital intensity (1) 23.4 % 21.2 % Capital intensity, excluding network expansion projects (1) 20.0 % 15.5 % Diluted earnings per share 2.20 2.19 0.5 Adjusted diluted earnings per share (1)(3) 2.21 2.31 (4.3) Operating results For the second quarter of fiscal 2024 ended on February 29, 2024: Revenue decreased by 0.8% to $730.5 million. On a constant currency basis(1), revenue decreased by 0.7% due to revenue growth in the Canadian telecommunications segment being offset by a decline in the American telecommunications segment, as explained below. Canadian telecommunications' revenue increased by 1.4%, mainly driven by the oxio acquisition completed on March 3, 2023 as well as the cumulative effect of high-speed Internet service additions over the past year. American telecommunications' revenue decreased by 3.1%, or 2.8% in constant currency, mainly due to lower video subscriptions and a lower customer base over the past year, with an increasing proportion of customers only subscribing to Internet services, partly offset by higher revenue per customer and a better product mix resulting from customers subscribing to increasingly fast Internet speeds. Adjusted EBITDA decreased by 1.2% to $347.1 million. On a constant currency basis, adjusted EBITDA decreased by 1.0%, mainly due to higher corporate costs, primarily due to the timing of certain operating expenses, including in relation to its plan to offer mobile services in Canada, while adjusted EBITDA remained stable in both the Canadian and American telecommunications segments, as explained below. Canadian telecommunications adjusted EBITDA remained stable mainly due to revenue growth being offset by higher sales and other operating expenses to drive and support customer growth. American telecommunications adjusted EBITDA remained stable mostly due to a better product mix of higher margin services and lower operating expenses driven by cost reduction initiatives and operating efficiencies, partially offset by a lower customer base. Profit for the period amounted to $96.6 million, of which $93.7 million, or $2.20 per diluted share, was attributable to owners of the Corporation compared to $104.3 million, $98.4 million, and $2.19 per diluted share, respectively, in the comparable period of fiscal 2023. The decreases in profit for the period and profit attributable to owners of the Corporation resulted mainly from higher depreciation and amortization expense and financial expense, and lower adjusted EBITDA, partly offset by lower income tax expense and acquisition, integration, restructuring and other costs. Adjusted profit attributable to owners of the Corporation(3) was $94.1 million, or $2.21 per diluted share(3), compared to $103.5 million, or $2.31 per diluted share, last year. Net capital expenditures were $170.8 million, an increase of 9.4% compared to $156.1 million in the same period of the prior year. In constant currency, net capital expenditures(1) were $171.4 million, an increase of 9.8% compared to last year, mainly due to higher costs in relation to customer premise equipment in the Canadian telecommunications segment, partly offset by lower spending in the American telecommunications segment, mainly due to the timing of network expansion projects. Excluding network expansion projects, net capital expenditures were $146.4 million, an increase of 28.5% compared to $113.9 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects(1) were $147.0 million, an increase of 29.0% compared to last year. Fibre-to-the-home network expansion projects continued in both Canada and the United States, with homes passed additions of more than 32,000 during the first six months of fiscal 2024. Capital intensity was 23.4% compared to 21.2% last year. Excluding network expansion projects, capital intensity was 20.0% compared to 15.5% in the same period of the prior year. Acquisition of property, plant and equipment increased by 4.2% to $180.2 million, mainly due to higher costs in the Canadian telecommunications segment, partly offset by lower spending in the American telecommunications segment. Free cash flow decreased by 15.1%, or 15.4% in constant currency, and amounted to $100.2 million, or $99.8 million in constant currency, mainly due to higher net capital expenditures. Free cash flow, excluding network expansion projects decreased by 22.2%, or 22.5% in constant currency, and amounted to $124.5 million, or $124.2 million in constant currency. Cash flows from operating activities increased by 40.6% to $285.4 million, resulting mostly from the timing of trade and other payables and trade accounts receivable, lower income taxes paid and acquisition, integration, restructuring and other costs, offset in part by higher interest paid and lower adjusted EBITDA. Cogeco Communications maintains its fiscal 2024 financial guidelines as issued on November 1, 2023. At its April 11, 2024 meeting, the Board of Directors of Cogeco Communications declared a quarterly eligible dividend of $0.854 per share, an increase of 10.1% compared to $0.776 per share in the comparable quarter of fiscal 2023. (1) Adjusted EBITDA and net capital expenditures are total of segments measures. Adjusted EBITDA margin and capital intensity are supplementary financial measures. Constant currency basis, adjusted profit attributable to owners of the Corporation, net capital expenditures, excluding network expansion projects, free cash flow and free cash flow, excluding network expansion projects are non-IFRS financial measures. Change in constant currency, capital intensity, excluding network expansion projects and adjusted diluted earnings per share are non-IFRS ratios. These indicated terms do not have standardized definitions prescribed by International Financial Reporting Standards ("IFRS") and, therefore, may not be comparable to similar measures presented by other companies. For more information on these financial measures, please consult the "Non-IFRS and other financial measures" section of this press release. (2) Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance. (3) Excludes the impact of acquisition, integration, restructuring and other costs, net of tax and non-controlling interest. Financial highlights   Three and six months ended February 29,2024 February 28,2023 Change Change in constant currency (1)(2) February 29,2024 February 28,2023 Change Change in constant currency (1)(2) (In thousands of Canadian dollars, except % and per share data) $ $ % % $ $ % % Operations Revenue 730,501 736,646 (0.8) (0.7) 1,478,190 1,498,946 (1.4) (1.6) Adjusted EBITDA (2) 347,112 351,215 (1.2) (1.0) 706,072 718,438 (1.7) (1.9) Adjusted EBITDA margin (2) 47.5 % 47.7 % 47.8 % 47.9 % Acquisition, integration, restructuring and other costs (3) 885 6,952 (87.3) 3,501 9,629 (63.6) Profit for the period 96,562 104,262 (7.4) 192,314 224,637 (14.4) Profit for the period attributable to owners of the Corporation 93,681 98,378 (4.8) 183,174 209,882 (12.7) Adjusted profit attributable to owners of the Corporation (2)(4) 94,054 103,488 (9.1) 197,780 216,959 (8.8) Cash flow Cash flows from operating activities 285,434 203,043 40.6 522,416 397,202 31.5 Free cash flow (2) 100,155 117,939 (15.1) (15.4) 237,748 223,067 6.6 6.3 Free cash flow, excluding network expansion projects (2) 124,545 160,181 (22.2) (22.5) 293,798 331,143 (11.3) (11.5) Acquisition of property, plant and equipment 180,247 172,967 4.2 333,796 407,604 (18.1) Net capital expenditures (2)(5) 170,769 156,125 9.4 9.8 317,196 353,096 (10.2) (10.3) Net capital expenditures, excluding network expansion projects (2) 146,379 113,883 28.5 29.0 261,146 245,020 6.6 6.5 Capital intensity (2) 23.4 % 21.2 % 21.5 % 23.6 % Capital intensity, excluding network expansion projects (2) 20.0 % 15.5 % 17.7 % 16.3 % Per share data (6) Earnings per share Basic 2.21 2.21 — 4.23 4.66 (9.2) Diluted 2.20 2.19 0.5 4.21 4.64 (9.3) Adjusted diluted (2)(4) 2.21 2.31 (4.3) 4.55 4.79 (5.0) Dividends per share 0.854 0.776 10.1 1.708 1.552 10.1 (1) Key performance indicators presented on a constant currency basis are obtained by translating financial results from the current period denominated in US dollars at the foreign exchange rate of the comparable period of the prior year. For the three and six-month periods ended February 28, 2023, the average foreign exchange rates used for translation were 1.3488 USD/CDN and 1.3489 USD/CDN, respectively. (2) Adjusted EBITDA and net capital expenditures are total of segments measures. Adjusted EBITDA margin and capital intensity are supplementary financial measures. Adjusted profit attributable to owners of the Corporation, free cash flow, free cash flow, excluding network expansion projects and net capital expenditures, excluding network expansion projects are non-IFRS financial measures. Change in constant currency, capital intensity, excluding network expansion projects and adjusted ...