New operating model focused on customer experience and operational excellence to power future growth. Expanded our customer value proposition with Breezeline Mobile launched across most of Breezeline's U.S. broadband footprint. Revenue increased by 1.2% compared to the same period last year to $750.6 million, reflecting revenue growth at Cogeco Connexion and stable revenue at Breezeline, in line with expectations. Adjusted EBITDA(1) of $365.8 million increased by 4.1% over last year. Profit for the period amounted to $76.3 million, a decrease of 24.8%, of which $70.4 million was attributable to owners of the Corporation, reflecting restructuring costs recognized during the quarter. Excluding the impact of restructuring and certain other costs, adjusted profit attributable to owners of the Corporation(1)(3) remained stable. Earnings per share on a diluted basis decreased to $1.67 from $2.16 in the third quarter of fiscal 2023, while adjusted diluted earnings per share(1)(3) rose by 4.7% to $2.45, which excludes the impact of restructuring and certain other costs. Free cash flow(1) amounted to $87.3 million, a decrease of 16.4% compared to last year reflecting restructuring costs recognized during the quarter, while cash flow from operating activities increased by 17.3% to $333.6 million due to the timing of certain working capital items. Free cash flow, excluding network expansion projects(1) decreased by 18.0% to $111.7 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, July 11, 2024 /CNW/ - Today, Cogeco Communications Inc. (TSX:CCA) ("Cogeco Communications" or the "Corporation") announced its financial results for the third quarter ended May 31, 2024. "We demonstrated solid performance again in the third quarter of 2024, with revenue growth and healthy expansion of our adjusted EBITDA margin due to an improving product mix, combined with an acceleration of our efforts to drive operational efficiency," said Frédéric Perron, President and CEO. "In the third quarter, we implemented the initial steps of a new operating model designed to deliver future growth and increase our focus on customer experience and operational excellence. "Growth in our Canadian telecommunications business was driven by the ongoing expansion of our Internet subscriber base under our Cogeco Connexion and oxio brands. We continue to be impressed by oxio's performance and its robust adoption by consumers and are cascading our learnings from this digital brand across our organization. "In the U.S., we rolled out Breezeline Mobile across most of our footprint, which will provide an even stronger incentive for new and existing customers to bundle their digital services with us. In addition, our Internet-first strategy and persistent endeavors to drive operational efficiency helped deliver adjusted EBITDA growth over last year. "Lastly, the new operating model and transformation we began during the quarter will allow us to sustain our growth, take our competitive agility to new heights, better serve our customers, and continue to build a strong culture where our colleagues thrive and succeed. We expect it to result in significant value creation for Cogeco over the coming years as the benefits of the transformation are realized." Consolidated Financial Highlights Three months ended May 31 2024 2023 Change Change in constant currency (1) (In thousands of Canadian dollars, except % and per share data) (unaudited) $ $ % % Revenue 750,583 741,785 1.2 0.9 Adjusted EBITDA (1) 365,824 351,328 4.1 3.9 Adjusted EBITDA margin (1) 48.7 % 47.4 % Profit for the period 76,334 101,538 (24.8) Profit for the period attributable to owners of the Corporation 70,402 95,892 (26.6) Adjusted profit attributable to owners of the Corporation (1)(3) 103,597 103,826 (0.2) Cash flows from operating activities 333,626 284,377 17.3 Free cash flow (1) 87,300 104,422 (16.4) (16.3) Free cash flow, excluding network expansion projects (1) 111,733 136,253 (18.0) (18.0) Acquisition of property, plant and equipment 171,034 189,656 (9.8) Net capital expenditures (1)(2) 168,384 169,793 (0.8) (1.2) Net capital expenditures, excluding network expansion projects (1) 143,951 137,962 4.3 3.9 Capital intensity (1) 22.4 % 22.9 % Capital intensity, excluding network expansion projects (1) 19.2 % 18.6 % Diluted earnings per share 1.67 2.16 (22.7) Adjusted diluted earnings per share (1)(3) 2.45 2.34 4.7 Operating results For the third quarter of fiscal 2024 ended on May 31, 2024: Revenue increased by 1.2% to $750.6 million. On a constant currency basis(1), revenue increased by 0.9% driven by revenue growth in the Canadian telecommunications segment, while revenue remained stable in the American telecommunications segment, as explained below. Canadian telecommunications' revenue increased by 2.2%, mostly driven by the cumulative effect of high-speed Internet service additions over the past year as well as the Niagara Regional Broadband Network acquisition ("NRBN") completed on February 5, 2024. American telecommunications' revenue remained stable as reported and in constant currency, mainly resulting from a higher revenue per subscriber and a better product mix resulting from customers subscribing to increasingly fast Internet speeds, offset by lower video subscriptions and a lower Internet subscriber base over the past year, with an increasing proportion of customers only subscribing to Internet services. Adjusted EBITDA increased by 4.1% to $365.8 million. On a constant currency basis, adjusted EBITDA increased by 3.9%, mainly due to higher adjusted EBITDA in both the American and Canadian telecommunications segments, as explained below, and lower corporate costs primarily due to the timing of certain operating expenses. American telecommunications adjusted EBITDA increased by 4.5%, or 3.9% in constant currency, mostly due to lower operating expenses driven by cost reduction initiatives and operating efficiencies. Canadian telecommunications adjusted EBITDA increased by 2.9%, mainly due to revenue growth, partly offset by higher sales and other operating expenses to drive subscriber growth. Profit for the period amounted to $76.3 million, of which $70.4 million, or $1.67 per diluted share, was attributable to owners of the Corporation compared to $101.5 million, $95.9 million, and $2.16 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 restructuring costs and depreciation and amortization expense, partly offset by higher adjusted EBITDA and lower income tax expense. Adjusted profit attributable to owners of the Corporation(3) was $103.6 million, or $2.45 per diluted share(3), compared to $103.8 million, or $2.34 per diluted share, last year. While adjusted profit attributable to owners of the Corporation remains stable, the increase of adjusted diluted earnings per share over last year reflects the benefit of the Corporation's repurchase and cancellation of shares. Net capital expenditures were $168.4 million, a decrease of 0.8% compared to $169.8 million in the same period of the prior year. In constant currency, net capital expenditures(1) were $167.8 million, a decrease of 1.2% compared to last year, mainly due to lower spending in the American telecommunications segment as expected due to the timing of network expansion projects, partly offset by higher purchases of customer premise equipment and other capital spending related to fibre-to-the-home network expansions in the Canadian telecommunications segment. Excluding network expansion projects, net capital expenditures were $144.0 million, an increase of 4.3% compared to $138.0 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects(1) were $143.4 million, an increase of 3.9% compared to last year. Fibre-to-the-home network expansion projects continued in both Canada and the United States, with homes passed additions close to 44,000(4) during the first nine months of fiscal 2024. Capital intensity was 22.4% compared to 22.9% last year. Excluding network expansion projects, capital intensity was 19.2% compared to 18.6% in the same period of the prior year. Acquisition of property, plant and equipment decreased by 9.8% to $171.0 million, mainly resulting from lower spending. Free cash flow decreased by 16.4%, or 16.3% in constant currency, and amounted to $87.3 million as reported and in constant currency, mainly due to higher restructuring costs. Free cash flow, excluding network expansion projects decreased by 18.0% as reported and in constant currency, and amounted to $111.7 million. Cash flows from operating activities increased by 17.3% to $333.6 million, mostly due to the timing of payments of trade and other payables and the collection of trade accounts receivable, lower income taxes paid and higher adjusted EBITDA. Cogeco Communications maintains its fiscal 2024 financial guidelines as issued on November 1, 2023. At its July 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, and related borrowing costs, 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. (4) Organic growth calculated by excluding additions resulting from acquisitions. Financial highlights   Three and nine months ended May 31 2024 2023 Change Change in constant currency (1)(2) 2024 2023 Change Change in constant currency (1)(2) (In thousands of Canadian dollars, except % and per share data) $ $ % % $ $ % % Operations Revenue 750,583 741,785 1.2 0.9 2,228,773 2,240,731 (0.5) (0.8) Adjusted EBITDA (2) 365,824 351,328 4.1 3.9 1,071,896 1,069,766 0.2 — Adjusted EBITDA margin (2) 48.7 % 47.4 % 48.1 % 47.7 % Acquisition, integration, restructuring and other costs (3) 45,669 11,368 — 49,170 20,997 — Profit for the period 76,334 101,538 (24.8) 268,648 326,175 (17.6) Profit for the period attributable to owners of the Corporation 70,402 95,892 (26.6) 253,576 305,774 (17.1) Adjusted profit attributable to owners of the Corporation (2)(4) 103,597 103,826 (0.2) 301,377 320,785 (6.1) Cash flow Cash flows from operating activities 333,626 284,377 17.3 856,042 681,579 25.6 Free cash flow (2) 87,300 104,422 (16.4) (16.3) 325,048 327,489 (0.7) (0.9) Free cash flow, excluding network expansion projects (2) 111,733 136,253 (18.0) (18.0) 405,531 467,396 (13.2) (13.4) Acquisition of property, plant and equipment 171,034 189,656 (9.8) 504,830 597,260 (15.5) Net capital expenditures (2)(5) 168,384 169,793 (0.8) (1.2) 485,580 522,889 (7.1) (7.3) Net capital expenditures, excluding network expansion projects (2) 143,951 137,962 4.3 3.9 405,097 382,982 5.8 5.5 Capital intensity (2) 22.4 % 22.9 % 21.8 % 23.3 % Capital intensity, excluding network expansion projects (2) 19.2 % 18.6 % 18.2 % 17.1 % Per share data (6) Earnings per share Basic 1.68 2.17 (22.6) 5.91 6.83 (13.5) Diluted 1.67 2.16 (22.7) 5.89 6.80 (13.4) Adjusted diluted (2)(4) 2.45 2.34 4.7 7.00 7.13 (1.8) Dividends per share 0.854 0.776 10.1 2.562 2.328 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 nine-month periods ended May 31, 2023, the average foreign exchange rates used for translation were 1.3562 USD/CDN and 1.3513 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 ...